Chapter 11 Announced - Part 6 - Plan 5.0/TCC Plan TBD

[CynicalScouter]

8 hours ago, johnsch322 said:

First I think she should be telling LC's and CO's that if they want to be channeled in then they need to pony up enough that it actually hurts them financially. Not to the point of putting them out of existence but actual financial pain. 

I think that was Stang's point that he wandered in and out of at a few points:

1) BSA and the LCs (and for that matter LDS and the other COs) will never, ever be able to produce $100+ billion BY THEMSELVES (insurance is another issue)

2) So under bankruptcy rules they have to demonstrate a "substantial contribution" (that is I believe a term of law/term of art). That could be interpreted in one of two ways (bear in mind I am NOT familiar with bankruptcy, but state civil)

FIRST that the entity accounted for a LARGE percentage of the final payouts. For example, BSA claims total claims value isn't $100 billion, it is $4-7 billion. If (hypothetically) BSA dropped $4 billion into the pot, then clearly that is a "substantial contribution" of either 57-100% of total payouts. Fine.

SECOND the entity surrendered a LARGE percentage of their total assets. For example, BSA claims $1 billion in total assets (I'm rounding here) of which it is contributing $139 million PLUS a loan/note worth $80 million to be aid off over several years. Is 14% enough of a financial sacrifice to meet the "substantial contribution"? That's why those LC percentages of what is truly "restricted" come into play. If a very poor LC (GULF COAST reported total assets of $409,791) contributes $140,734 all in cash, that is 28% of total assets. Is 28% percent enough "financial pain"? Is 28%  "substantial contribution" given the fact that they have under $500k in TOTAL assets?

Etc.

 

[johnsch322]

11 minutes ago, CynicalScouter said:

If a very poor LC (GULF COAST reported total assets of $409,791) contributes $140,734 all in cash, that is 28% of total assets. Is 28% percent enough "financial pain"? Is 28%  "substantial contribution" given the fact that they have under $500k in TOTAL assets?

That is substantial depending on their operational expenses. On the flip side there are LC's with 10M plus who are giving far less a percentage. Take a look at Los Padres with 17M assets and giving 1.7M.  At 28% they would be contributing 6M and having 10M plus left.

[CynicalScouter]

https://www.reuters.com/legal/transactional/boy-scouts-plaintiffs-lawyers-call-breakdown-local-council-abuse-claims-2021-09-21/

"The Boy Scouts have disclosed how much each local council has agreed to pay, but Zalkin said his clients want to know the value of the claims local councils are facing that they would be releasing by voting in favor of the plan.

The Boy Scouts say the disclosures about the local councils are sufficient and that valuations of claims against each local council would not produce “reliable” estimates.

The dispute was put on the back burner after a lawyer for the official tort claimants’ committee, James Stang of Pachulski Stang Ziehl & Jones, offered to share information his team has put together surrounding certain claim valuations and how much is being contributed by local councils compared with their available assets."

Edited September 23, 2021 by CynicalScouter

[MYCVAStory]

1 minute ago, CynicalScouter said:

The dispute was put on the back burner after a lawyer for the official tort claimants’ committee, James Stang of Pachulski Stang Ziehl & Jones, offered to share information his team has put together surrounding certain claim valuations and how much is being contributed by local councils compared with their available assets."

But, because it came out of mediation it requires a "meet and confer" with the BSA before any LC dashboards are released.  If the BSA doesn't agree then the TCC must file a motion to have the court agree to its release and this of course would allow the BSA to object.   Let's hope that the BSA doesn't try to delay so that those interested in the financial picture of their LC might be able to learn a bit more, and victims will get a better idea of their LC's ability to pay.  This is critical to an informed vote and transparent reorganization.

[elitts]

17 hours ago, David CO said:

If a Catholic diocese went through bankruptcy a few years ago during the clergy sexual abuse scandal, are their CO's still on the hook for the BSA lawsuits? 

Functionally speaking, when an organization goes through bankruptcy it ceases to exist (or goes on only as a trust fund).  What comes out the other side is a completely new organization that just happens to have the same name and some of the same assets. (barring a few select circumstances that can re-link the two organizations)

15 hours ago, Muttsy said:

Not so. You identified the 900 pound gorilla in the room. It is the kiss of death for this Plan. All claimants will do what you do, divide the pot by the number of claims and vote the check box that says “Heck, no!

These bankruptcy lawyers may all be Ivy League but they don’t know boo about people. 

I don't think your appraisal of people is realistic either.  I've spent 20 years working with "the public" via phone calls, letters, mailings and in person visits.  Even fairly intelligent people are regularly unwilling to read more than a few lines of a letter or document, especially if the wording is complex or if it uses legal or technical language.  The "average" person is going to look at a page or two of documentation, get confused and then want to call someone for an explanation and likely doesn't even own a calculator or realize they have one on their phone. 

13 hours ago, SiouxRanger said:

Personally, I don't have any sympathy for National that the mess it created could take years to resolve, with time running adversely against National, the tortfeasor.  National made this mess and it should step up and take real measures that "equitably compensate" abuse survivors. And give them sound information to make an informed decision on its Plan.  "Informed Consent" as a concept has worked its way into many aspects of life, except, apparently, bankruptcy law.  And if National liquidates, well, someone will step up and pick up the pieces.  It just won't be the self-interested folks that got everyone in this mess.

Accepting National's argument that it can't afford delay (to clean up our own mess) in effect, blames the abuse victims.

And that is intolerable.

Think about what "Should happen" is really only useful if what "should happen" is in the realm of the possible.  When what should happen is impossible, spending time worrying about it and being upset about it doesn't really do anything other than wear away at the emotional well-being of the worrier. 

National simply cannot "equitably compensate" the survivors and they cannot give each survivor sound information upon which to base their decision.  The amount per claimant is useful as a comparison with other mass torts and it's useful as a way to discuss the amounts being contributed to the overall pool, but when it comes to an individual making a decision for themselves, that information is irrelevant to the point of being misleading without a complete understanding of how the claim rating is going to work with regard to severity and SoLs.  It would be rather like having to pick a used car to buy and being told that the average # of miles of all the cars on the lot is 60k.

 

[CynicalScouter]

Just now, CynicalScouter said:

The Boy Scouts say the disclosures about the local councils are sufficient and that valuations of claims against each local council would not produce “reliable” estimates.

So let's game this out and I am going to use Greater Alabama Council as an example. 445 claims, 13 not time barred.

Keep in mind: I am NOT going to detail the abuse types, this will be referred to as "Tier 1" "Tier 2" etc.

We also do NOT know how many of the below are "unique and timely" or not, so bear with me.

	# of claims	Base Matrix Valye	Maximum Matrix Value	Base * # Claims	Maximum * # Claims
Tier 1	134	$600,000	$2,700,000	$80,400,000	$361,800,000
Tier 2	111	$300,000	$1,350,000	$33,300,000	$149,850,000
Tier 3	74	$150,000	$675,000	$11,100,000	$49,950,000
Tier 4	100	$150,000	$675,000	$15,000,000	$67,500,000
Tier 5	10	$75,000	$337,500	$750,000	$3,375,000
Tier 6	4	$3,500	$8,500	$14,000	$34,000
Unknown/Unconfirmed	10
Missing Data	2
				$140,564,000	$632,509,000
			10% (closed state)	$14,056,400	$63,250,900

 

 

So, the result is a very UNreliable estimate of $14-$63 million in valuation of claims. using the RSA's Gray 1/2/3/Open/Closed system.

And Greater Alabama Council's contribution?

3,685,328 with Total Assets of 19,912,578 and Total Net Assets of 19,278,576. Either way, it works out to be around 20% of assets.

Now, just to get to this number I had to make no fewer than 4 assumptions

1) There are at least a dozen claims naming both Greater Alabama Council AND some other council. How were they split?

2) Of the 13 non-time-barred, how many were of each tier/type? No idea.

3) For Assets (total, net, whatever) were the properties fair market value, book value, appraisal? Etc.

4) Is 10% the right percent? What about 5%?

Etc.

 

 

 

 

[CynicalScouter]

20 minutes ago, MYCVAStory said:

because it came out of mediation it requires a "meet and confer" with the BSA before any LC dashboards are released. 

Release to the public, or other mediation parties? The reason I ask is because Stang seemed to indicate he'd share them with Zalkin and others NOW (or last evening).

[MYCVAStory]

1 minute ago, CynicalScouter said:

Release to the public, or other mediation parties? The reason I ask is because Stang seemed to indicate he'd share them with Zalkin and others NOW (or last evening).

Public as a court document.

[Muttsy]

Wasn’t the hearing supposed to start again today at 1 pm eastern?

[CynicalScouter]

5 minutes ago, Muttsy said:

Wasn’t the hearing supposed to start again today at 1 pm eastern?

Yes. It is using yesterday's Zoom info.

Currently they are trying to figure out what sub-sub-section they are discussing because some lawyers use different systems.

I. A. 1.

vs.

I. A. a.

The bigger issues is how they votes are getting voted.

There's a real problem with the "hub" system.

In short, the "hub" system is

1) Ballots get mailed to lawyers (hundreds/thousands).

2) The lawyer will then be "instructed" by victims on how to vote.

3) How much communication must there be? Can the lawyer vote the ballot if the client directs the lawyer to do so? What if the client is silent?

This really, really looks like the Coalition wants to hold the ballots and then be "informed" by the victims how to fill out that physical ballot.

The Coalition wants to hold the physical ballots. Gee, I wonder why?

Edited September 23, 2021 by CynicalScouter

[CynicalScouter]

Here's an issue.

What happens if the lawyers holding the physical ballots is officially in favor of the plan and their client says "no"? The lawyer is now conflicted. One of the attorneys noted that is what happened to her with PG&E.

What happens if the client wants to officially object to the plan but the attorney supports it? Now the attorney is conflicted. No, survivors have to not only vote no, they have to hire ANOTHER lawyer.

Edited September 23, 2021 by CynicalScouter

[Muttsy]

It’s not working. 

[CynicalScouter]

Judge reminded lawyers about ethics and attorney disciplinary rules.

There's a really concern here the Coalition is going to vote against client directions and/or pressure clients unethically.

Another question: will those who are taking the $3500 option sway the vote? She is anticipating challenges to the vote results already.

Edited September 23, 2021 by CynicalScouter

[Eagle1993]

4 minutes ago, Muttsy said:

It’s not working. 

@CynicalScouter Do you have the link to register for this Zoom?  May be too late, but some may be interested.  

[fred8033]

2 minutes ago, CynicalScouter said:

There's a really concern here the Coalition is going to vote against client directions and/or pressure clients unethically.

Absolutely.  If a lawyer hands in a 50/50 split of ballots (or anywhere close) than the submissions don't strongly influence the result.  If the ballots all lean one way or another, it can strongly sway the vote.  ... Seems like a game right out of TV Survivor.