Chapter 11 Announced - Part 9 - Confirmation Hearing

[Eagle1970]

24 minutes ago, Eagle1993 said:

Today's hearing has been pretty interesting.  Certain insurers are saying their policies REQUIRE the owner of the policy to help in the defense/review of the claim.  That allowed insurers to offer their insurance to BSA at a lower premium.  Now, the witness is saying, the debtors and claimants worked together and violated the contract terms of the insurance policies.

I think the issue is that in the plan TDPs and neutral there is no provided defense to help the insurers as required per their contract terms.

It is unfortunate that, while valid and necessary to go through all of these motions, they may lead to a substantial delay in payments to victims.  My entire career was insurance related, and every day of delay is more profit.  Many of us are already in our late 60's or 70's and may not live long enough to see this process to conclusion.

Edited March 29, 2022 by Eagle1970

[Eagle1993]

2 minutes ago, Eagle1970 said:

It is unfortunate that, while valid and necessary to go through all of these motions, they may lead to a substantial delay in payments to victims.  My entire career was insurance related, and every day of delay is more profit.  Many of us are already in our late 60's or 70's and may not live long enough to see this process to conclusion.

I expect many trusts are built upon future insurance settlements.  I would have thought this part was standard language.  I wouldn't be surprised if there is an update to the plan that clarifies insurance rights for non settling insurers.  I would be surprised in the insurance side leads to major delays, even though I do think insurance may be landing some good points today.

The big issue, where it could lead to major delays, is district court and the non debtor releases.  I think we will see the bankruptcy court approve the plan in April (unless something shocking comes up).  Then, we may know by June where district court lands on this case.  If they approve ... then I expect further appeals are likely moot and the plan will go forward.  If they reject ... well, I have no idea where this goes.

Just my guesses ... but April/June are probably key dates coming up.  Now, when payments will be made (other than those $3500 quick payouts) ... I have no idea.  That could take a while as they need to setup the TDP/neutral review process & collect payments from parties.  I think we are definitely closer to the end than the beginning.

[Eagle1993]

On cross the insurance witness struggled a bit to explain how the TDPs or expedited payment negatively impacts them.  However, I think they make a decent case on the neutral path.  There is no limit.  Plus, in their contract, insurance companies should have assistance of the insured to investigate the incident.  That seems to be non existent in the neutral path plus there isn't much involvement of insurance.  

Now, they will get a bill and told take it or leave it.  The issue is that if they go to court then, then are concerned that the bill will be looked at as binding.

The Judge and DOJ had raised issues about the neutral path.  I think the insurance companies are raising some valid concerns regarding this path as well.  Now, I think it could be fixed (perhaps by lowering the fee AND allowing insurance companies to participate during the process).  We will see...

[scoutesquire]

I think it is overlooked that anyone that wants to appeal this case is going to have to put up nearly a 200m dollar bond.  I believe at this point that would be only the non-settling insurers.  That is a lot of cash to put up.  

[Eagle1993]

26 minutes ago, scoutesquire said:

I think it is overlooked that anyone that wants to appeal this case is going to have to put up nearly a 200m dollar bond.  I believe at this point that would be only the non-settling insurers.  That is a lot of cash to put up.  

I think that only applies once district court would approve, but would be good if someone could confirm.  There have been many recent examples where district court has rejected non debtor releases.  I tend to agree though, if district court approves, there may be limited groups appealing.

[fred8033]

2 hours ago, Eagle1993 said:

Today's hearing has been pretty interesting.  Certain insurers are saying their policies REQUIRE the owner of the policy to help in the defense/review of the claim.  That allowed insurers to offer their insurance to BSA at a lower premium.  Now, the witness is saying, the debtors and claimants worked together and violated the contract terms of the insurance policies.

I think the issue is that in the plan TDPs and neutral there is no provided defense to help the insurers as required per their contract terms.

This a previously discussed insurer concern.  Months ago?  Year+?   Insurers saying they are being thrown under the bankruptcy bus without the policy holder helping triage / defend the claims.   Instead, the policies will be held by a trust who's interest is to get the most possible from the insurer.  

Question:  Is this really different than other huge insurance claims.  Bankruptcy is like the insured going out of business.  Further liability is passed up to the insurance company?  Once the insured maxed out how much to pay, the insured stops defending the claim.

[ThenNow]

1 hour ago, Eagle1993 said:

Plus, in their contract, insurance companies should have assistance of the insured to investigate the incident.  That seems to be non existent in the neutral path plus there isn't much involvement of insurance.  

A further argument is/was expanded in one of the Certain Insurers' filed objections. I can't imaging it doesn't come up again. There is a provision for BSA/the Trustee to help claimants obtain information they would otherwise have to scrap for through discovery. It's in the discovery protocols. This, specifically, runs squarely afoul of the duty to join their insurers in defending against claims. That's the argument.

[Eagle1993]

Interesting.  Insurers brought up Thorpe Insulation bankruptcy where the non settling insurers won an appeal.  Basically ... if a plan isn't insurance neutral they can distrupt it even late in the process.

 

[MYCVAStory]

Informative discussion related to reliability of the TDP in addressing claim validity.  A better description may be the "validity" only given the points trying to be made.  As a reminder, the TDP was always intended to be a first step and placeholder.  The Trust is to design a specific questionnaire that would then be validated along with other evidence by trust personnel.  Dr. Treacy continues to discuss the RELIABILITY of the POC but doesn't seem to understand its limited use in the TDP.   Anyway....a good discussion though of a "Conceptual Framework for Child Sexual Abuse" by Sgroi.  Here's a Google Books link: https://www.google.com/books/edition/_/XfBX3y5O8WcC?hl=en&gbpv=1&pg=PA9&dq=sgroi+framework  Pages are missing but this framework includes five stages: Engagement, Sexual Interaction, Secrecy, Disclosure and Suppression.  That framework hits the nail on the head.  

[Eagle1993]

A psychologist for certain insurers was pushing to require all TDPs to go through a certain specific level of testing prior to payment.  She made some very interesting points, including that around 40% of the individuals she has dealt with were false claims (at least based on certain standards).   Her main point is that self questionaires are almost worthless in ensuring claims are valid.

That said ... what she is asking is unprecedented.  In addition, it would take on the order of nearly $200M and 187 person years of work.   It would probably work on a very small scale, but wouldn't fit this case.

Very nice woman who is very concerned that money will go to fraud vs actual victims, but her solution is probably not feasible.  (My opinion after listening to cross).

 

[Eagle1993]

1 hour ago, MYCVAStory said:

Informative discussion related to reliability of the TDP in addressing claim validity.  A better description may be the "validity" only given the points trying to be made.  As a reminder, the TDP was always intended to be a first step and placeholder.  The Trust is to design a specific questionnaire that would then be validated along with other evidence by trust personnel.  Dr. Treacy continues to discuss the RELIABILITY of the POC but doesn't seem to understand its limited use in the TDP.   Anyway....a good discussion though of a "Conceptual Framework for Child Sexual Abuse" by Sgroi.  Here's a Google Books link: https://www.google.com/books/edition/_/XfBX3y5O8WcC?hl=en&gbpv=1&pg=PA9&dq=sgroi+framework  Pages are missing but this framework includes five stages: Engagement, Sexual Interaction, Secrecy, Disclosure and Suppression.  That framework hits the nail on the head.  

This is a good point.  There are processes in place, just not a 6 hour psychologist evaluation for every claimant.  I think a very valid point raised by BSA .... the trust is able to determine what process to follow on a case by case basis.  They have the flexibility to require that 6 hour interview if they felt it was necessary .... it just doesn't mandate what she is recommending.  I don't see much coming from her testimony.

[MYCVAStory]

6 minutes ago, Eagle1993 said:

She made some very interesting points, including that around 40% of the individuals she has dealt with were false claims (at least based on certain standards). 

Her experience is as a court investigator and deals with a lot of domestic issues where abuse allegations are used as retaliation unfortunately.  This is not the situation with the population in this bankruptcy.  TCC attorney on cross asked her if she would discuss with the Trustee applicable questionnaire items..."Of course."  Coalition attorney asks who pays her and if it's the insurers.  She doesn't seem to know!  Says they come from the "Boy Scouts Defense Fund."  Document presented showing that yes, the insurers are paying her.  "Yes, but they still come from the defense fund?!"  Seems very sincere about Survivors being compensated for valid claims but her lack of bankruptcy and trust experience was a mistake for the insurers.  Insurer's attorney looking on very pained.

[MYCVAStory]

Schullman's taped deposition up next.  Looked and sounded as you'd expect an attorney to look and sound after he had filed hundreds of clients' POCs.  Unsure, unsteady.  "How many of the POCs you signed did you speak to the client personally?"  "I don't know."   "Did you physically sign every POC"  "No, I did not."  "How were your signatures authorized?"  "I indicated on SmartAdvocate (software) I had reviewed it. so it was afffixed."  "You signed Mr. X's POC on the 12th....you were retained on the 12th....but it wasn't reviewed until the 13th and the client was asked by your associate for additional information.  So why was the POC dated the 12th?"  It's going on like this.  Suggestion to mass tort attorneys; if you're going to take on hundreds or thousands of clients expect this kind of scrutiny and don't save money by NOT having the infrastructure to accurately and personally manage ALL of your clients.  This is red meat for the insurers.

[ThenNow]

Schullman. Yikes. Exposing all that may be wrong, problematic and questionable with the intake, vetting and signature processes with some firms. Ack. JLSS taking many notes with as sour look on her face.

Edited March 29, 2022 by ThenNow

[MYCVAStory]

Coming attraction for Wednesday....Ken Rothweiler to be a witness.  

Edited March 29, 2022 by MYCVAStory