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

[Eagle1970]

Ok.  Got it.  Looks like the document is blank, but may well be the same "grey" factors as previously stated.

[Rabid]

No survivor in a SOL state will ever vote for a plan where they get nothing.
 

Or would they no longer have a vote?

[CynicalScouter]

Letter posted to Facebook from a law firm.

“As you may have heard, early this morning, the Boy Scouts of America filed its Fifth Amended Plan. While we are still reading and reviewing the plan, we wanted to highlight some aspects of it that you may hear about on the news and give you our initial thoughts. Links to the plan, disclosure statement, and proposed order regarding voting methodology are found at the bottom of this email.

The plan contains a settlement of $787 million with The Hartford insurance company. The Hartford is one of the largest insurers in the case with massive exposure for these claims. We do not find this settlement acceptable and did not consent to it on your behalf.
The plan contains a settlement of $250 million with TCJC (also known as The Mormon Church and/or LDS). This money will likely only go towards compensating victims abused through the TCJC’s sponsorship of Troops. We do not find this settlement acceptable and did not consent to it on behalf of our TCJC/LDS clients.
Local Councils: $600 million. While we initially supported a resolution with the Local Councils in this range, it was premised on the assumption that the Local Councils and BSA would maximize the pressure exerted on insurers. Ok they reached with Hartford. We are now reconsidering our position on whether to support this resolution. You can view your local council’s specific contribution beginning on page 281 of the Amended Disclosure Statement. You can view a summary of your local councils assets beginning on page 311 of the Amended Disclosure Statement.
Approximately $220 million from Boy Scouts of America: For the same reasons we articulated with respect to the Local Councils, we are reconsidering whether to support this resolution with Boy Scouts of America.
 

We expect two things moving forward: 1) we anticipate objecting to the plan on behalf our clients. There will be many reasons for these objections, which we will describe to you once we fully review the details of the plan. 2) We anticipate providing you with advice as to how we believe you should vote. We expect our advice will be to vote not to confirm the plan, but we are still processing the details of this complicated document. The plan can also change as negotiations continue and our advice may ultimately change.

 

Voting has not started: Please understand that, contrary to some reports and statements, voting has not started.

 

How much will you recover?: This is impossible to calculate at this point. The settlements described above do not include many insurance companies and many chartering organizations. It is not until we know the total amount contributed to the Victim’s Trust that we will be able to give you a ballpark estimate as to your recovery. However, even at that point it is difficult to analyze because we do not know how many claims will be eliminated either through vetting or through the “quick pay” option.

 

$3500?: You may have heard this figure either through town hall meetings or on various websites. This is what bankruptcy lawyers sometimes refer to as a “quick pay” option. It is basically an option for people to accept $3500 without further vetting or analysis of their claims. It will be paid promptly, no questions asked. Generally speaking, we would not advise our clients to exercise this option, as we believe it significantly undervalues most claims.

 

What we need from you:

 

In the next few days, you will receive an AdobeSign document that you can electronically sign that authorizes us to use our discretion and vote on your behalf. It specifically rejects your option to accept the $3,500 “quick pay” option. If you believe you would like to elect this option, please call us.
In the next few weeks, our clients that a) have not submitted evidence of their participation in scouting and b) were not found on charter rosters, will receive an email with a link to a website where such information can be submitted.
We will continue to update you on our ongoing negotiations.”

[Eagle1970]

1 minute ago, Rabid said:

No survivor in a SOL state will ever vote for a plan where they get nothing.
 

Or would they no longer have a vote?

I would think if we were not eligible via SOL, we would not get a vote.  But such a plan would be doa.  And the law firms would never support it.

[CynicalScouter]

4 minutes ago, Rabid said:

No survivor in a SOL state will ever vote for a plan where they get nothing.
 

Or would they no longer have a vote?

One of the argument being made is that no they won’t get a vote. And that’s not coming from BSA that’s coming from attorneys for victims in states that don’t have stature of limitations. The argument is why should the 52,000 or so victims in states that have claims worth $0 (due to statutes of limitations) have the same vote as those victims with “live” claims.

The Zalkin and other law firms are making the case the votes should ONLY go those victims inside the SoL should have any say and that to do otherwise is unfair.

Edited September 16, 2021 by CynicalScouter

[Eagle1970]

2 minutes ago, CynicalScouter said:

One of the argument being made is that no they won’t get a vote. And that’s not coming from PSA that’s coming from attorneys for victims in states that don’t have stature of limitations. The argument is why should the 52,000 or so victims in states that have claims worth $0 (due to statutes of limitations) have the same vote as those victims with “live” claims.

The response is that we have time to get the states to pass a window.  (12 months after settlement is reached in this version).  Some states are working on that.

[vol_scouter]

25 minutes ago, CynicalScouter said:

Letter posted to Facebook from a law firm.

@CynicalScouter  This comment leaves the possibility of a change to supporting the proposal by the BSA.  Could this be posturing to get more money added?  My thought is no, it is planned to end the BSA exclusivity and propose a much different solution.

 

[CynicalScouter]

6 minutes ago, vol_scouter said:

Could this be posturing to get more money added?

EVERYTHING is about getting more money added. These are lawyers representing victims. It is their ethical obligation to get as much money for their clients as possible.

[vol_scouter]

3 minutes ago, CynicalScouter said:

EVERYTHING is about getting more money added. These are lawyers representing victims. It is their ethical obligation to get as much money for their clients as possible.

That is clear but do you believe that they are planning to return to the RSA 5.0 if there is some increase in the amount of money or that they have little interest in this course?

[Eagle1993]

8 minutes ago, vol_scouter said:

@CynicalScouter  This comment leaves the possibility of a change to supporting the proposal by the BSA.  Could this be posturing to get more money added?  My thought is no, it is planned to end the BSA exclusivity and propose a much different solution.

 

From what I understand ... many lawyers and claimants were told they could expect big payouts from insurance companies.  Think $XB or even $XXB.  What they are seeing from a major insurance company is <$1B ... which is making them reconsider and may then demand more money from other sources (LCs, BSA and COs).

[CynicalScouter]

3 minutes ago, vol_scouter said:

That is clear but do you believe that they are planning to return to the RSA 5.0 if there is some increase in the amount of money or that they have little interest in this course?

Keep in mind there is the TCC and then there are literally hundreds of law firms, including the AIS group including Kosnoff.

There is no one answer here.

[vol_scouter]

2 minutes ago, CynicalScouter said:

Keep in mind there is the TCC and then there are literally hundreds of law firms, including the AIS group including Kosnoff.

There is no one answer here.

@CynicalScouter  That is clearly understood.  It is possible that the TCC could oppose a deal that eventually gets voted upon and is approved.  However, the TCC is a big opponent who, as has been pointed, might sway the judge's opinion.  So the opposition is a significant obstacle unless some achievable increase in money will satisfy.

[CynicalScouter]

5 minutes ago, Eagle1993 said:

From what I understand ... many lawyers and claimants were told they could expect big payouts from insurance companies.  Think $XB or even $XXB.  What they are seeing from a major insurance company is <$1B ... which is making them reconsider and may then demand more money from other sources (LCs, BSA and COs).

At one point, and I may be wrong here so bear with me, I believe I read that Hartford's insurance accounted/covered 40% of the claims.

Doing some math 40% of X = $787 million.

X = $1,967,500,000/82500 or around $24,000 per average claim.

No where near the tens or hundreds of billions being discussed. But let's assume that I mis-remembered and it Hartford wasn't 40% of claims but 4%

Doing some math 4% of X = $787 million.

X = $10,967,500,000/82500 or around $240,000 per average claim.

 

 

[CynicalScouter]

4 minutes ago, vol_scouter said:

However, the TCC is a big opponent who, as has been pointed, might sway the judge's opinion.  So the opposition is a significant obstacle unless some achievable increase in money will satisfy.

The only reason several of these firms choked down the RSA was because they were told "the big money is in the insurance companies". Now that BSA cut the Hartford deal 2.0, there is NO way the other insurers are going to pay one dime more than what Hartford paid.

[Eagle1993]

1 minute ago, CynicalScouter said:

At one point, and I may be wrong here so bear with me, I believe I read that Hartford's insurance accounted/covered 40% of the claims.

Doing some math 40% of X = $787 million.

X = $1,967,500,000/82500 or around $24,000 per average claim.

No where near the tens or hundreds of billions being discussed. But let's assume that I mis-remembered and it Hartford wasn't 40% of claims but 4%

Doing some math 4% of X = $787 million.

X = $10,967,500,000/82500 or around $240,000 per average claim.

 

 

I'm 99% sure it was 40% which was mentioned in a TCC townhall.  That is why I was shocked the Hartford settlement was so low.  It really cuts the legs out of any real major payment to claimants.  I wish BSA didn't have that initial Hartford settlement.  Without that, I think this deal would be much closer to finalizing.