Chapter 11 Announced - Part 5 - RSA Ruling

[MYCVAStory]

5 minutes ago, CynicalScouter said:

And if I am the attorney for victims with valid claims worried my clients are going to get outvoted by invalid claims, I’d might just say “too bad, vet now, however long it takes”

Every dollar to an invalid claim is one dollar out of the pocket of my client with the valid claim. Moreover those invalid claims dilute my clients vote (word used was “swamps” their votes).

Of course you would, and the TCC has said that it believes in a robust vetting system.  But, this comes down to a judge and whether she is willing to do the right thing or the expeditious thing.

[CynicalScouter]

6 minutes ago, MYCVAStory said:

But, this comes down to a judge and whether she is willing to do the right thing or the expeditious thing.

The problem is “right thing” depends on perspective.

 

One “right” argument is just let them sort it out later.

Another “right” argument is vet now and limit voting and recovery to valid voters, which means 50,000 time barred claimants get thrown out.

[CynicalScouter]

10 minutes ago, MYCVAStory said:

TCC has said that it believes in a robust vetting system

Yes, after the voting takes place. Why should someone with no valid legal claim (time barred) get the same vote as someone with no time bar?

what is the legal argument for that? How is that fairness?

etc.

 

Edited August 28, 2021 by CynicalScouter

[MYCVAStory]

13 minutes ago, CynicalScouter said:

Yes, after the voting takes place. Why should someone with no valid legal claim (time barred) get the same vote as someone with no time bar?

They shouldn't.  They absolutely shouldn't.  But, the debtor won't support the months and more it would take for complete validation.  That's why work continues to remove duplicates and more importantly, figure out what attorney is representing each claimant.  Sadly, this is why bankruptcy is the WORST mechanism for dealing with sexual abuse claims.

[David CO]

1 hour ago, johnsch322 said:

I am also OK with time barred claims getting full shares from the settlement fund.  

I not only think that this is the compassionate thing to do, I think it is also the smart thing to do.  If claimants start turning on each other, they will lose much of their public support.  They will convince the general public that it really is all about the money.

 

[CynicalScouter]

13 minutes ago, David CO said:

I not only think that this is the compassionate thing to do, I think it is also the smart thing to do.

It may be compassionate, but it has no basis in reality or law.

The bankruptcy court cannot suddenly make valid a claim that, under state law, is invalid. If you claim is time-barred under state law, the bankruptcy court isn't suddenly going to make it so.

That's why the "Gray" system was put in place to address those instances where it may or may not be possible, statutes of limitation notwithstanding, to press a civil case. And even then it is of questionable legality.

[ThenNow]

4 minutes ago, CynicalScouter said:

The bankruptcy court cannot suddenly make valid a claim that, under state law, is invalid. If you claim is time-barred under state law, the bankruptcy court isn't suddenly going to make it so.

That's why the "Gray" system was put in place to address those instances where it may or may not be possible, statutes of limitation notwithstanding, to press a civil case. And even then it is of questionable legality.

If those “invalid” claims are wholesale set aside, this will have been a farce, wrapped in a disaster, shrouded in a catastrophe, encased in a moral outrage. My disgust will know no bounds. It will be a horrible miscarriage for so many. Yet again, I go back to Mosby’s statement and the wording I previously analyzed.

[David CO]

1 hour ago, ThenNow said:

If those “invalid” claims are wholesale set aside, this will have been a farce, wrapped in a disaster, shrouded in a catastrophe, encased in a moral outrage.

I guess it depends on where you think the crime occurred.  Did it happen exclusively in a remote location in a campground of a time-barred state, or did it also happen in a hidden away corner of a secret file room at BSA headquarters?  I think both.  It shouldn't be treated like a local issue.

[T2Eagle]

4 hours ago, CynicalScouter said:

And from the perspective of those attorneys, their job is the maximize the amount their clients get. Every dollar that goes to a victim without a valid claim (due to time-barred/statute of limitations) is one less dollar their client gets.

it's not entirely accurate to say the attorneys' job is to maximize the amount their clients get.  An attorney's duty is to zealously represent their client.  Whether that means maximizing a monetary award is for the client to determine.  if a client wants his attorney to advocate for a settlement that awards compensation equally regardless of the SOL differences among claimants then the attorney is duty bound to advocate for that irrespective of their view of the wisdom of it or what effect it might have on the attorney's well being.

One of the challenges of contingency representation is that the attorney's pecuniary interest may not align with a client's desires.  An additional challenge comes when an attorney is representing a group of clients because an individual client's desire may diverge from the group's.

[SiouxRanger]

6 hours ago, CynicalScouter said:

Yes, after the voting takes place. Why should someone with no valid legal claim (time barred) get the same vote as someone with no time bar?

what is the legal argument for that? How is that fairness?

etc.

 

I absolutely agree.

I cannot conjure up even a hint of a wisp of a legally sound argument to support a time barred claim recovering anything.

[SiouxRanger]

6 hours ago, CynicalScouter said:

If you claim is time-barred under state law, the bankruptcy court isn't suddenly going to make it so.

I agree, but think the court "can't suddenly make it so."

Not without authority in the bankruptcy code.

[SiouxRanger]

7 hours ago, MYCVAStory said:

They shouldn't.  They absolutely shouldn't.  But, the debtor won't support the months and more it would take for complete validation.  That's why work continues to remove duplicates and more importantly, figure out what attorney is representing each claimant.  Sadly, this is why bankruptcy is the WORST mechanism for dealing with sexual abuse claims.

I agree that someone with a time barred claim should have no vote.  And because they have no right to recovery and no path to have a right to recovery.

The law does not tend to favor those who "sit on their rights."  It is why we have statutes of limitation.  Courts do not want to be in the business of adjudicating stale claims, where documentary proof has not been retained (discarded in reliance of the existence of a statute of limitations), witnesses are dead, can't be located, or their memories faded-because these factors tend to diminish the ability of the court to assure both sides a fair process. Society wants people to feel confident they can rely on the stability of the law in conducting their business affairs.

National's "lack of support for months and months for complete validation" should have no significant bearing on the decision.  National lit the fuse on this whole process-that it may take a long time to do things correctly-that is a reason to do them incorrectly???

Sometimes, it is helpful to analyze situations by looking at what we don't have.  We don't have anyone proposing that any registered scouter over 6 feet tall gets a vote.  Why not?  How are they different from someone who once had a legally enforceable claim but no longer does?

Were the law to be applied properly, neither the over 6 footers nor those who have time barred claims would recover nothing.

But, National has elevated those holding time barred claims to those entitled to "something" in a legal world where they would get nothing.

National is attempting to create a class of stakeholders and thereby create a class voters which should not exist.

And why would National do that?

National desperately wants its Plan to be approved and that happens only if approved by claimant votes.  The more claimants who vote for the Plan the more likely it will be approved.

So, "Let's just invent a class of voters who have every reason to vote for the Plan-and let's create lots of them."

They'll be predisposed to vote for the Plan because they will very likely get nothing if they don't.

And so the ballot box was stuffed.

 

And, just for insurance, if the attorneys representing this new class of voters truly will be voting the ballots of these claimants (by proxy, of sorts), we'll pay them $10 million to get their attention, and thereafter, nearly a million a month, though we have no invoice, don't know what they've done, nor benefit provided, time expended...

 

When one strikes down (ignores) the law to achieve a result, there is no law.  And that is a bad place.

 

[SiouxRanger]

8 hours ago, David CO said:

I not only think that this is the compassionate thing to do, I think it is also the smart thing to do.  If claimants start turning on each other, they will lose much of their public support.  They will convince the general public that it really is all about the money.

It is the compassionate thing to do, no doubt.

It is the smart thing, in slight defense of National, as it can make the claim that it is trying to (equitably?) compensate victims by including a class with no legally enforceable claim in the settlement.  But National does not need to be successful in this attempt, just make the attempt to claim that it tried. (As I've posted, National definitely seems to want those folks voting in favor of its Plan.)

With respect to claimants "turning on one another," my read is that that is unavoidable.

I find it highly unlikely that a Claimant with a claim against a wealthy LC, CO, backed by sound insurance coverage will want to share their recovery with a Claimant who is less fortunate.  And even less so, share with a Claimant who should recover nothing.

That may not be the whole story, however, as the voting process is a bit murky to me.

If each Claimant actually casts their own vote and is knowledgeable about the degree to which the Plan (and Settlement mechanism) will decrease their recovery below or inflate it above what their individual circumstances might yield, we should have a truly meaningful vote.

If those votes are cast by their attorneys, en masse, then Claimants will get what they get.

And even at that, if Claimants with no legally enforceable claims get to vote, from all I've heard here, those folks vastly outnumber Claimants with legally enforceable claims, and may well vote themselves some of the money that would otherwise go to folks with legally enforceable claims.  The Claimants with the greatest legal entitlement to recovery will be short-changed.

 

[SiouxRanger]

6 hours ago, T2Eagle said:

it's not entirely accurate to say the attorneys' job is to maximize the amount their clients get.

 

6 hours ago, T2Eagle said:

if a client wants his attorney to advocate for a settlement that awards compensation equally regardless of the SOL differences among claimants then the attorney is duty bound to advocate for that irrespective of their view of the wisdom of it or what effect it might have on the attorney's well being.

 

6 hours ago, T2Eagle said:

An attorney's duty is to zealously represent their client. 

This is entirely accurate. It is an attorney's ethical responsibility to understand the legal aspects of a situation, the client's circumstances, and then advise the client regarding different courses of action, the consequences of those courses of action, and the range of typical results.  Sometimes the attorney recommends a course of action as the one most likely to coincide with the client's known interests.

And then let the client decide how they want to proceed.

A client who directs an attorney to take a course of action that the attorney does not recommend, or which is significantly more adverse to the client's interests (as perceived by the attorney), will likely trigger a CYA letter to the client stating the essential and controlling facts and law, the course of action recommended by the attorney, a statement of the course of action client has directed the attorney to pursue, and a discussion of how the client's desired course of action compares to that recommended by the attorney, highlighting what the client is giving up.   The purpose is not only to put a statement of these matters on the record with the client, but also fend off heirs of the client who surface some day claiming that client was not adequately represented.  (Clients don't live forever, and the attorney won't have their client as a witness to defend them.)  The greater the deviation of the client's direction from the attorney's recommendation, the more such a letter should be considered.  Client should sign a receipt at the end of the letter to show proof of delivery.

But the really big problem here is representing multiple clients who have adverse interests.

It is a breach of professional ethics for an attorney to represent simultaneously two clients with adverse interests.

Exceptions exist where "full disclosure" is given to the adverse clients, and they sign an informed consent (and perhaps varies widely from state to state).

How does one "give full disclosure?"

"Well, YOU didn't tell me THAT!!!"

"Had I known THAT, I NEVER would have agreed to YOU representing both of us!!!"

 

And yet, we apparently have a number of firms representing Claimants with legally enforceable claims, and Claimants with unenforceable claims.  And those classes of Claimants are competing for the same apple, and thereby have conflicting interests.

Seems like an inherent conflict of interest to me.

 

So, back to the initial premise:  duty to represent one's client zealously

How can an attorney make diametrically opposed arguments for these two clients?

"May it please the Court:  Your Honor, my client, Claimant A is entitled to the whole apple, and my client Claimant B is entitled to half that same apple.  I have no further argument."

Whether the attorneys involved are paying any attention, or consider the risk to them of adverse consequences to be low, CLAIMANTS should be paying a lot of attention.

And therein lies the near inevitability of Claimant classes opposing each other.

[Eagle1993]

The time bared claim is a complex discussion.  If you remember back to pre bankruptcy, the reason BSA faced a major risk was that they were headquartered in New York prior to 1954. 1954 to 1978 they were in New Jersey and post 1978 in Texas.  One argument is that the claims against BSA should follow the SOL rules of those states from those times. 

Then you have an issue where SOL is a bit squishy as argued in the Illinois case mentioned earlier in one of these threads.  The Illinois courts basically said the SOL for child sex abuse are not applicable if there was a coverup.  

So… unless the court plans to go case by case, state by state and determine how state law applies then I think they should be considered valid claimants and get a vote.  Now I agree that SOL could be factored in on payouts; however those laws are changing all the time.  What happens in a year when more states change laws?