Bankruptcy, everything but the legalese

[vol_scouter]

@ThenNow  OK, got it.  I know that there were some disagreements that were handled in some manner.  Remember that the Scout Executives are all from professionals and historically could not compete for upper council management (usually above Field Directors) positions in the council in which they are serving so Scout Executives in large councils have likely served in three or more councils.  So the ability to conceal the local situation is not always possible.  Also, there is a lot of camaraderie among the Scout Executives as one sees at Top Hands each year.  So it is likely that there was some cooperation knowing that all had to work together to achieve the requisite result.  No doubt that some discussions were 'spirited' but, somehow, they found a solution that all were able to agree upon whether smiling or not. 

 

[Eagle94-A1]

Stupid question, but here it goes.

If BSA does a BSA only Chapter 11, what happen when LCs and COs get sued? How will the insurance that both LC's and CO's paid be handled? Will insurance companies say "not our problem" or will they be brought into the additional lawsuits? 

[vol_scouter]

8 minutes ago, Eagle94-A1 said:

Stupid question, but here it goes.

If BSA does a BSA only Chapter 11, what happen when LCs and COs get sued? How will the insurance that both LC's and CO's paid be handled? Will insurance companies say "not our problem" or will they be brought into the additional lawsuits? 

Interesting question since I believe that the National Council contracted for the insurance coverage.  The insurance companies will likely maintain that they will cover claims against the National Council but have no obligation to the local councils.  I am not an attorney and have not seen the contracts so take it as what it is, second or third hand.

[johnsch322]

17 minutes ago, Eagle94-A1 said:

Stupid question, but here it goes.

If BSA does a BSA only Chapter 11, what happen when LCs and COs get sued? How will the insurance that both LC's and CO's paid be handled? Will insurance companies say "not our problem" or will they be brought into the additional lawsuits? 

If it is only the BSA who goes bankrupt insurance policies will not be part of the bankruptcy. LC’s and CO’s should still have their coverage. 

[Eagle1993]

55 minutes ago, Eagle94-A1 said:

Stupid question, but here it goes.

If BSA does a BSA only Chapter 11, what happen when LCs and COs get sued? How will the insurance that both LC's and CO's paid be handled? Will insurance companies say "not our problem" or will they be brought into the additional lawsuits? 

Based on what I have seen in other lawsuits.

I think it will depend on the case & liability.  From what I have seen, a lawsuit could be filed against all of the following:

• National BSA (that will be dismissed due to bankruptcy)
• Local Councils
• Chartered Org
• Unit Leader(s)
• Individual

Each of these groups will be asked to be dismissed.  The judge could say ... looking at the facts, I see that XYZ has 0 liability and so they cannot be included in the lawsuit.

Then, whoever remains, a could be sued.  I believe either a judge and/or jury would then assign liability.  I think they do this with precents ... like 20% parents, 20% CO, 10% LC, 50% National BSA.

After all of that, then they could assign damages (and punitive charges) depending on state.

So ... lets say they say $2M of damages only.  So, CO would owe $400K and LC $200K.

The CO & LC would owe that.  Now, they could then sue their insurance company if insurance doesn't pay but the court would expect payment from them.  

Now, if the LC and/or CO go bankrupt, the insurance debate will be included in the bankruptcy.

[vol_scouter]

The National Council contracted and paid the liability insurance in past years.  Local councils had some accident policies but typically did not carry liability insurance.  So if the insurance companies were in this current bankruptcy with the corporation that contracted and paid for the liability insurance, I don't believe that it will be available to local councils or CO's.  The local councils will be unlikely to have liability coverage.  The CO's might but will argue that the liability lies in Scouting and not the CO's. 

[johnsch322]

2 minutes ago, vol_scouter said:

The National Council contracted and paid the liability insurance in past years.  Local councils had some accident policies but typically did not carry liability insurance.  So if the insurance companies were in this current bankruptcy with the corporation that contracted and paid for the liability insurance, I don't believe that it will be available to local councils or CO's.  The local councils will be unlikely to have liability coverage.  The CO's might but will argue that the liability lies in Scouting and not the CO's. 

If the LC’s were insured in the policies it does not matter who paid for them. 

[vol_scouter]

38 minutes ago, johnsch322 said:

If the LC’s were insured in the policies it does not matter who paid for them. 

So if the National Council contracted and paid for the policies with ABC insurance company who then pays into a trust for a BSA only Chapter 11, then a local council gets sued the insurance company is still liable?  It is true that the BSA can pay to cover any part of the organization that it is mutually agreeable to the BSA and the insurance company.  However, when ABC insurance company pays into a chapter 11 and the BSA effectively ceases to exist (it is a 'new; entity free of debt), ABC is no longer insuring the BSA or any part of the organization.  When an LC gets sued, will it not be on its own?  Otherwise, insurance companies could be liable far beyond what they agree to insure as far as total amount of claims.  Not trying to be argumentative but this seems wrong but that does not mean that it is not the law.

[johnsch322]

6 minutes ago, vol_scouter said:

So if the National Council contracted and paid for the policies with ABC insurance company who then pays into a trust for a BSA only Chapter 11, then a local council gets sued the insurance company is still liable?  It is true that the BSA can pay to cover any part of the organization that it is mutually agreeable to the BSA and the insurance company.  However, when ABC insurance company pays into a chapter 11 and the BSA effectively ceases to exist (it is a 'new; entity free of debt), ABC is no longer insuring the BSA or any part of the organization.  When an LC gets sued, will it not be on its own?  Otherwise, insurance companies could be liable far beyond what they agree to insure as far as total amount of claims.  Not trying to be argumentative but this seems wrong but that does not mean that it is not the law.

The insurers will not be paying anything under a BSA only bankruptcy rather the insurance policies themselves will be part of the trust. 

[vol_scouter]

4 minutes ago, johnsch322 said:

The insurers will not be paying anything under a BSA only bankruptcy rather the insurance policies themselves will be part of the trust. 

So then the LC's will not be insured as almost none (maybe none) had their own liability policies.

[johnsch322]

8 minutes ago, vol_scouter said:

So then the LC's will not be insured as almost none (maybe none) had their own liability policies.

As I said before if they were named in the original policy they will still have that coverage. 

[vol_scouter]

2 minutes ago, johnsch322 said:

As I said before if they were named in the original policy they will still have that coverage. 

First, I do not know how they are designated, by name or a group (councils) that is defined as charter holders.

Second, if the liability policies are part of the trust, then I would imagine that the value of those policies belongs to the trust.  Policies are usually written to provide some amount of coverage per incidence and a lifetime maximum for the policy.  So say for a particular year the policy was $1 M per incidence with a $20 M maximum for the year length of time that is the period of the policy.  Say that there were 3 cases that year settled for $500,000, $1,000,000, and $500,000 for a total of $2 M dollars for the covered period.  That would mean that the trust would have $18 M.

Third, let's say that the chapter 11 is for the BSA and that LC PQR gets sued for $2 M and loses.  So then this state court could compel the trust to pay $1 M from the $18 M leaving $17 M in the trust from that insurance company.  

Fourth, the implication is that the trust will decrease with time.

Is that what I am to understand?

[fred8033]

7 hours ago, Eagle94-A1 said:

Stupid question, but here it goes.

If BSA does a BSA only Chapter 11, what happen when LCs and COs get sued? How will the insurance that both LC's and CO's paid be handled? Will insurance companies say "not our problem" or will they be brought into the additional lawsuits? 

When I read this, I think about a single insurance company paying out twice for the same incident.  I can't see an insurance company paying out a portion for a BSA claim.  Then, later paying a separate portion for a LC claim.  And, a separate portion for a CO claim.  ... My understanding ... and this is what I'd like to understand ... before the insurance company pays anything to cover a list of incidents, that payment would have to cover the incident as a whole; not just the portion owed by one party.  

Are we in a multi-billion dollar game of chicken right now?  No one can afford never reaching an agreement.  Not BSA.  Not the LCs.  Not the COs.  Not the victims.  Not the victim's lawyers.  As sick as it sounds, the only parties that may do better if an agreement can't be reached seems to be BSA and the insurance companies.  BSA because it could go thru a BSA-only bankruptcy.  Insurance companies because they can push out, delay and fight liability.   

Edited February 3, 2022 by fred8033

[T2Eagle]

5 hours ago, Eagle1993 said:

Based on what I have seen in other lawsuits.

I think it will depend on the case & liability.  From what I have seen, a lawsuit could be filed against all of the following:

• National BSA (that will be dismissed due to bankruptcy)
• Local Councils
• Chartered Org
• Unit Leader(s)
• Individual

Each of these groups will be asked to be dismissed.  The judge could say ... looking at the facts, I see that XYZ has 0 liability and so they cannot be included in the lawsuit.

Then, whoever remains, a could be sued.  I believe either a judge and/or jury would then assign liability.  I think they do this with precents ... like 20% parents, 20% CO, 10% LC, 50% National BSA.

After all of that, then they could assign damages (and punitive charges) depending on state.

So ... lets say they say $2M of damages only.  So, CO would owe $400K and LC $200K.

The CO & LC would owe that.  Now, they could then sue their insurance company if insurance doesn't pay but the court would expect payment from them.  

Now, if the LC and/or CO go bankrupt, the insurance debate will be included in the bankruptcy.

One thing I've wondered about is what the court cases look like after a BSA only bankruptcy.  If I understand it correctly, the main theory of negligence is that BSA, because of the extensiveness of the Ineligible Volunteer Files BSA, knew or should have known it had a problem with predators using its program to access victims.  But if BSA is dismissed from the case how do the IV files get into evidence.  Further, given that the files were kept secret even from the LCs, where is the negligence?  A plaintiff would have to find a specific instance of negligence, and that would be much harder.  The standard would be what would a reasonable person at that time have done.  That's not an easy case to make.

[1980Scouter]

7 hours ago, fred8033 said:

When I read this, I think about a single insurance company paying out twice for the same incident.  I can't see an insurance company paying out a portion for a BSA claim.  Then, later paying a separate portion for a LC claim.  And, a separate portion for a CO claim.  ... My understanding ... and this is what I'd like to understand ... before the insurance company pays anything to cover a list of incidents, that payment would have to cover the incident as a whole; not just the portion owed by one party.  

Are we in a multi-billion dollar game of chicken right now?  No one can afford never reaching an agreement.  Not BSA.  Not the LCs.  Not the COs.  Not the victims.  Not the victim's lawyers.  As sick as it sounds, the only parties that may do better if an agreement can't be reached seems to be BSA and the insurance companies.  BSA because it could go thru a BSA-only bankruptcy.  Insurance companies because they can push out, delay and fight liability.   

The lawyers win too the longer the case goes on.