Chapter 11 Announced - Part 5 - RSA Ruling

[CynicalScouter]

August 25 disclosure hearing postponed to September 21.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/fd0900a9-afc8-469a-a68e-cb3afdf442ed_6101.pdf

That said, the August 25 hearing as NOT been formally cancelled but that may be coming or the August 25 hearing may turn into a hearing on other issues.

Edited August 20, 2021 by CynicalScouter

[CynicalScouter]

20 minutes ago, SiouxRanger said:

Adult Scouter A attends a Troop campout.  An incident of abuse occurs on that campout.  Adult Scouter A has no knowledge of or involvement with the abuse.  Later, a claim (lawsuit)  is filed against National, LC, CO, and Adult Scouter A.

Part of the problem will be what precisely those insurance policies said.

I know the MODERN BSA insurance policies say https://www.scouting.org/health-and-safety/gss/gss10/
 

Quote

This coverage provides primary general liability coverage for registered volunteer Scouters with respect to claims arising out of an official Scouting activity, which is defined in the insurance policy as consistent with the values, Charter and Bylaws, Rules and Regulations, operations manuals, and applicable literature of the Boy Scouts of America. This coverage responds to allegations of negligent actions by third parties that result in personal injury or property damage claims that are made and provides protection for Scouting units and chartered organizations on a primary basis.

The BSA general liability insurance program provides volunteers and chartered organizations additional excess coverage for automobiles above a local council’s automobile liability policy or a volunteer’s or chartered organization’s watercraft liability policy. The owner’s vehicle or watercraft liability insurance is primary. The excess insurance, whether it is the local council auto or BSA general liability, is available only while the vehicle or watercraft is in the actual use of a Scouting unit and being used during an official Scouting activity. 

The insurance provided to unregistered Scouting volunteers through the general liability insurance program is excess over any other insurance the volunteer might have to his or her benefit, usually a homeowners, personal liability, vehicle, or watercraft policy. 

The general liability policy does not provide indemnification or defense coverage to those individuals who commit intentional and/or criminal acts. The Boy Scouts of America does not have an insurance policy that provides defense for situations involving allegations of intentional and/or criminal acts. 

Scouting youth are not insured under the general liability policy.

So, the way I read it (again, not an attorney) is

1) If the registered adult leader in that campout was NOT a party to the abuse and had no knowledge ("Adult Scouter A has no knowledge of or involvement with the abuse."), covered.

2) The adult leader WAS THE ABUSER, not covered.

Edited August 20, 2021 by CynicalScouter

[ThenNow]

15 minutes ago, SiouxRanger said:

So, regarding National insurance policies under which the CO's were allegedly insureds, would that coverage also extend to adult leaders in the unit chartered by that CO?

I’ve also spent way too much time pondering the implications of all this hooey on E&O and D&O at all related levels. If this has been discussed, I’d love to be pushed toward the relevant discussion, regardless the necessity to play table tennis or other such. 

[SiouxRanger]

Though I can't yet convince myself that I understand how or on what theory National's plan or threat to dis-insure the CO's is based, if the underlying policies are somehow transferred to the Settlement entity, Adult Scout A is likely being dis-insured along with the CO which charters that unit.

Lovely.

[CynicalScouter]

32 minutes ago, SiouxRanger said:

And then, if National's coverage does insure Adult Scouter A, does National's Plan, vis-a-vis terminating insurance coverage for the CO's, also terminate coverage for Adult Scouter A?

5 minutes ago, SiouxRanger said:

Though I can't yet convince myself that I understand how or on what theory National's plan or threat to dis-insure the CO's is based, if the underlying policies are somehow transferred to the Settlement entity, Adult Scout A is likely being dis-insured along with the CO which charters that unit.

Lovely.

I think something needs to be clarified here. BSA is not "terminating" the coverage. What they are saying is

1. We NEVER covered COs until 1978; LDS at least contests that.
2. Even then, there were insurance caps each year (total amount FOR ALL claims, total amount PER claim, etc.) and
3. When it comes time to pay out, the DIRECT abuse claims (John Scout vs. BSA) will be paid out first, THEN whatever BSA or insurance money is left over (it won't be much) will be used to cover INDIRECT claims (John Scout vs. Chartered Organization).

This is the exact language of BSA's position from page 234 of this https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/7082572a-2eeb-4a35-bc9b-e515925846fd_5486.pdf

Quote

3. Chartered Organizations’ Rights Under the BSA Insurance Policies
It is the BSA’s position that, starting in or around 1978, the BSA included Chartered
Organizations as insureds on its Insurance Policies. Specifically, it is the BSA’s position that the
BSA added sponsors and Chartered Organizations as insureds. The Debtors believe that the for
the 1976 and 1977 primary policies, there is some ambiguity as to whether Chartered Organizations
are additional insureds. Certain Chartered Organizations, including The Church of Jesus Christ,
firmly reject the BSA’s position. The Church of Jesus Christ maintains the position that it has rights
as a non-debtor insured under the BSA’s pre-1976 Insurance Policies, and that such rights cannot
be settled or otherwise compromised without its consent. Further, the Chartered Organizations,
including The Church of Jesus Christ, believe that the Chartered Organizations also have rights to
the BSA’s post-1976 Insurance Policies.
To the extent that the Chartered Organizations have rights to the BSA’s post-1976
Insurance Policies, those rights are subject to the terms of the Insurance Policies that may have
deductible obligations (as noted above), aggregate limits, exhausted limits, settlements, exclusions,
etc.
For example, it is the position of certain insurers that the BSA’s 1978 Insurance Policy
includes a deductible endorsement that requires a $250,000 deductible be met for each occurrence;
therefore, it is the position of certain insurers that Chartered Organizations access to the 1978 to
1980 Insurance Policies is limited by the required deductible obligation. The Chartered
Organizations’ access to the BSA’s 1980 to 1982 Insurance Policies may likewise be limited given
that many of these policies are either insolvent, exhausted or released through settlement. Further,
the BSA’s 1983 to 1985 Insurance Policies are also subject to aggregate limits, many of which have
been substantially eroded based on pre-petition settlements and payments.
Additionally, in 1984, the Insurance Policies included an endorsement that expressly
provided that the Insurance Policies would be primary insurance for Chartered Organizations.
However, prior to 1984, there was no such endorsement or language in the BSA policies.
Therefore, the Debtors believe that for all pre-1984 claims, Chartered Organizations would not have
primary access to the BSA’s Insurance Policies. Certain of the Chartered Organizations disagree
with this position. It is the Debtors’ position that Chartered Organizations would likewise be
responsible for the high deductibles on all post-1986 Insurance Policies, certain of the Chartered
Organizations disagree with this position and believe that they would not be responsible for the
payment of deductibles as a condition of obtaining Insurance Coverage.

 

Edited August 20, 2021 by CynicalScouter

[SiouxRanger]

So, does National's Plan leave the CO's uninsured, or leave them with whatever coverage the policies provide by the policies' terms, and the difference to the CO's is whether they:

1.  make some $ contribution to the Settlement Fund, and thereby be entitled to a release from all liability, or, 

2.  not make a $ contribution and be left to whatever coverage the policies provide, and retain all liability for claims.

And, I guess this analysis of #2 is complicated by the Hartford deal which would effectively reduce the coverage that the Hartford policies would provide to the CO's if they don't make a $ contribution.

Is this closer to what National proposes?

 

(I would note that it seems that Hartford has played a very good game.  It negotiated the best deal it could for itself, with the proviso that if Century is able to negotiate an even better deal than Hartford did, Hartford gets the benefit of Century's superior negotiating power/result as Hartford's liability is reduced by some formula.)

[CynicalScouter]

TCC/FCR/Coalition once again ask the judge to order Century/Chubb to produce documents regarding Century's total assets and how much of Chubb can be accessed to pay for Century's liabilities.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/cd0733b5-2a6e-4567-b79c-e973843ae343_6102.pdf

 

Quote

Despite the Movants’ letters to this Court and our attempts inside and outside of mediation to obtain the requested information, the Insurers have continued to refuse to produce the Documents, in the absence of an order from this Court compelling them to do so. As set forth in our prior letters to the Court, these Documents are critical to the Survivors’ ability to evaluate the Plan and the funding of the Settlement Trust contemplated therein.

 

[CynicalScouter]

7 minutes ago, SiouxRanger said:

So, does National's Plan leave the CO's uninsured, or leave them with whatever coverage the policies provide by the policies' terms, and the difference to the CO's is whether they:

1.  make some $ contribution to the Settlement Fund, and thereby be entitled to a release from all liability, or, 

2.  not make a $ contribution and be left to whatever coverage the policies provide, and retain all liability for claims.

Right, BSA's position is "you do not have access to the BSA insurance policies." The COs, in BSA's view, had ALWAYS been uninsured, at least under BSA's policies prior to 1978.

The CO's are arguing: we THOUGHT we were covered by BSA and that BSA promised to make up the difference between what insurance paid and what the CO owed (e.g. If it is a $1 million claim, and the insurance covered $500,000, BSA would pick up the other $500,000).

Since most of the abuse occurred prior to the 1978 policies, that means the COs (and whatever insurance they carried) are on the hook for anything prior to that date.

Now, here's the problem: the COs are NOT in bankruptcy here. They are trying to climb aboard the BSA bankruptcy. They are looking for third-party releases for a fee/contribution to the settlement. And that's going to be so much more difficult when a) BSA has said we ain't paying (at least prior to 1978) and b) we are going to pay the direct victims first and THEN whatever pennies are left we will use to cover the CO's dues/payment.

Edited August 20, 2021 by CynicalScouter

[SiouxRanger]

@cynicalscouter.  Your first sentence " you do not have access to BSA insurance policies" sounds a bit like "terminating" to me.  But if you read it as "You've got access to BSA policies, but that access (benefits to you CO's) is not what you thought it was, and your coverage is pretty thin, because:"

1.  "You CO's have no coverage before 1978, regardless what you assumed. Where did you get that idea?"

2.  "There are aggregate caps and per occurrence caps, some of which we, National, have already accessed, leaving less for you CO's to cover your liability. Coverage/benefits will run out long before your liability is covered."  

3. "Our, National's, liability gets paid first, and if any coverage remains, only then will you CO's be covered and only to the extent of remaining coverage."  (In effect, National gets the lion's share of the insurance benefits.

By way of example, assume:

    A.  That National has a $10M policy.  

    B.  That National has already, pre-bankruptcy, used $4M of that coverage, leaving $6M in remaining coverage.  

    C.  That Claims filed in the bankruptcy have a value of $12M of which National's share is $8M and the CO's share is $4M. (A 2/3rds to 1/3rd ratio.)

National's position seems to be that the $6M of remaining coverage is applied to National's $8M liability, leaving National's liability of $2M unpaid, and to be discharged in bankruptcy, and further, leaving the CO's with its/their full share of $4M of Claims remaining unpaid which the CO will either cover by a negotiated contribution to the Settlement Fund and receive a discharge, or go-it-alone with no insurance (because National used it all up).

CO's on the other hand would prefer remaining insurance coverage to be allocated between National and the CO's prorate, that is, National only gets 2/3rds of the remaining insurance coverage, or $4M, and the CO's getting 1/3rd, or $2M.  (I'd note that Claimants would prefer National's preferred analysis as it leaves the CO's exposed to greater liability and therefore leveraged to pay more money into the Settlement Fund.)

 

Is this a fair statement of the insurance issue?

 

(By this analysis, Hartford's sweet deal is in effect a lowering of its aggregate cap. So, in my example above, even though the remaining coverage on the $10M policy is $6M, the Hartford deal might lower that to $5M.  That would not make any difference to the CO's in my example, as no coverage remains for them, but it would have a deleterious effect on CO's in situations were there would be some coverage for CO's if there was no sweet deal.)

 

 

 

[ThenNow]

I hereby lodge my official request for a new thread to talk about BSA and CO insurance or lack thereof. My head is throbbing trying to keep up. My wife’s undergraduate degree is from the top Risk Management & Insurance college in the nation. She always told me her texts were a great cure for insomnia. 😬 Not so here, but it is getting a bit hyper-focused and specialized. My view. Maybe I don’t mind table tennis that much after all?

[CynicalScouter]

23 minutes ago, SiouxRanger said:

Your first sentence " you do not have access to BSA insurance policies" sounds a bit like "terminating" to me.

You can’t “terminate” something that never started.

BSA is saying that, prior to 1978, there was no BSA insurance coverage of COs. Can’t terminate that which never started in the first place.

[Eagle1970]

8 hours ago, ThenNow said:

I understand that decision, but for us as claimants, this issue of confidentiality, disclosure and access to our Proofs of Claims is directly related to and driven by the bankruptcy. This particular instance of reporting to law enforcement was not generated out of whole cloth or a recent, random occurrence, like the Shower Stall Creeper. This investigation is the direct result of a Proof of Claim filed by a victim who was likely unaware the case would be turned over to law enforcement. I’m not saying that is a bad thing, but we sort of deserve to be talking about this. It goes to the essence of BSA’s dealing with child sexual abuse (preferential “Oh, crap!” reporting for SilverWeasel?), the bait and switch (for some) as to anonymity/confidentiality and the major issue of what happens after the case to ensure investigations, prosecutions where possible and disclosure to the fullest extent allowable. That’s my reaction to you putting this in the basement with the sump pump, a rickety old card table and a single bulb dangling from the ceiling. (I’m playing with word pictures, not impugning you. You are my Spartacus and I will NEVER forget it!!)

Wait a minute.... Are our proofs being shared with law enforcement?  I'm about done with this charade.  Guaranteed confidentiality and offered equitable compensation.  Now there is neither???

[ThenNow]

1 minute ago, Eagle1970 said:

Wait a minute.... Are our proofs being shared with law enforcement?  I'm about done with this charade.  Guaranteed confidentiality and offered equitable compensation.  Now there is neither???

I’m trying to figure out exactly what the H. E. Double Hockey Sticks is going on. (Btw, this conversation has been banished to the basement. I know, right? I guess I’ll see you there. Forgot what it’s called..)

[ThenNow]

9 minutes ago, ThenNow said:

Btw, this conversation has been banished to the basement. I know, right? I guess I’ll see you there. Forgot what it’s called.

Because I’m a forum ‘how to’ dork, this is da link (I think):

 

[vol_scouter]

29 minutes ago, Eagle1970 said:

Wait a minute.... Are our proofs being shared with law enforcement?  I'm about done with this charade.  Guaranteed confidentiality and offered equitable compensation.  Now there is neither???

All states have mandatory reporting that may have a time period (some number of years after the incident occurred).  The BSA and local councils (LC) expected, based on historical reporting, 8,000 to 12,000.  More than about 25,000 was not felt to be a likely result.  Obviously, the number of claims filed far exceeded those expectations.  So i those claims included new reports of child sexual abuse in the LCs.  Those new ones had to be reported by law if in the reporting period.  

People have accused the BSA of not reporting incidents that could be child sexual abuse.  We all would expect that the LC Scout Executives would follow the mandatory reporting requirements in their state.  I am not aware that incidents were not reported after mandatory reporting in their states (not saying that it never happened but not personally aware of such a case).

Hopefully, this helps.