Chapter 11 announced - Part 11 - Judge's Opinion

[Eagle1993]

18 minutes ago, swilliams said:

I know that's a very broad question, lol.  If the judge's opinion isn't 100% approval or denial of the plan, what needs to happen, and which entity needs to take the steps needed, to get to the end of the bankruptcy process and begin to settle with CSA victims?

 

BSA owns the next actions.

1) They need to meeting with LDS along with TCC, FCR & Coalition.  The LDS will not have any releases for non-scouting abuse (as they wanted if the vicitim/abuser were in scouts regardless of setting). The LDS will need to choose ... be part of the plan with revised releases or leave the plan.

2) BSA to discuss with TCC, FCR & Coalition if they are ok with lack of findings supporting TDPs.  

3) BSA to meet with settling insurers that covered Guam.  See if they are ok proceeding or if the BSA needs to go to the Guam Archdiocese bankruptcy court and fight to free that insurance policy from the stay.

4) BSA to meet with various parties about non abuse claims & lack of releases. 

5) BSA to clean up some language that had some minor issues.   

In terms of timing ... it really depends on the settling insurers, TCC, Coalition and FCR and how significant they see the changes are to the plan.  The LDS portion was only going to LDS claimants, so that helps limit the impact a bit.  

My hope is that we see an updated plan in a few weeks that addresses the judge's concerns.  The judge will allow objections to the changes and then a hearing.  Perhaps a ruling a few days later.

I think the big news is that the overall structure of the plan is fine.  Most of the major objections were overruled.  She telegraphed the exact issues and hinted at a path to fix (for example ... she said the plan is fully funded without LDS ... hint hint).  

For CSA victims, unfortunately, as the TCC has said, this is only the first step.  Once confirmed, there will be appeal(s) that could take a few months.

Post appeal ... then the trust ramps up.  They have to create a process to vet claims (as they were not vetted well as part of bankruptcy).  That process must be approved by bankruptcy court.  Unfortunately, it looks like it will be a while before payments are made.  I'm sure the TCC will update until the trustee takes over.

[1980Scouter]

I think the time frame is longer than weeks. Months or longer due to all the parties that have to come to an agreement on different issues. 

Surely there will not be 100% agreement on any changes made. 

We have definite progress but I really begin to wonder if BSA will run out of money before this is complete. 

 

[ALongWalk]

43 minutes ago, 1980Scouter said:

I think the time frame is longer than weeks. Months or longer due to all the parties that have to come to an agreement on different issues. 

Surely there will not be 100% agreement on any changes made. 

We have definite progress but I really begin to wonder if BSA will run out of money before this is complete. 

 

I also wonder if the BSA runs out of money before every issue is worked through. I have to believe that strong LC’s are making contingency plans to survive on their own or in some sort of confederation. 

[ThenNow]

I have nothing to say that is worthy of much attention, other than I am SOOO VERY grateful for Eagle1993 and his excellent reverse engineering of this opinion, and other such. I, for one, am indebted to you. Well done, sir. Jolly good show. Jolly good, indeed. Seriously bro. I really mean it for realz. Hip, hip and pip pip. 

I shall return to vexing over the next round of dredging up the past to reiterate the dastardliness one more time. And the band played on...

Edited August 1, 2022 by ThenNow

[RememberSchiff]

21 hours ago, Eagle1993 said:

BSA owns the next actions.

“We are committed to working with all constituents to make the necessary changes required by the ruling to drive this process forward and we remain optimistic about securing approval of a final Plan as soon as possible” the Boy Scouts said in an emailed statement.

...

In a ruling that could have a significant impact on the case, Silverstein refused to approve the settlement involving the LDS Church. The judge noted that the settlement includes liability releases for non-Scouting abuse claims and “stretches third-party releases too far.”

Perhaps The Church of Latter Day Saints will amend their Sept "deal" to address the Judge's concerns about including non-Scouting incidents.

...

Silverstein also ruled that a committee of abuse claimants attorneys who would advise the trustee overseeing the victims compensation fund will have no consent or veto rights over procedures developed by the trustee, a retired federal judge, to ferret out fraudulent claims.

Yeah, another powerless advisory committee. Reminds me of ...

https://www.sltrib.com/religion/2022/08/01/boy-scout-bankruptcy-hits-snag/

https://www.reuters.com/world/us/us-judge-rejects-boy-scouts-27-bln-sex-abuse-deal-2022-07-30/

[ThenNow]

47 minutes ago, RememberSchiff said:

Silverstein also ruled that a committee of abuse claimants attorneys who would advise the trustee overseeing the victims compensation fund will have no consent or veto rights over procedures developed by the trustee, a retired federal judge, to ferret out fraudulent claims.

Yeah, another powerless advisory committee. Reminds me of ...

Perhaps, but this is a matter of her knowing foxes aren’t good guards for henhouses. (I guess ferrets are fine.) Judge Houser is going to be vetting claims and sniffing out fraud, with the hammer of penalties and prosecution. JLSS wants no self interested parties - or those with something to hide - to obstruct the process from tip to tail. The STAC has plenty of advisory and oversight influence in other matters, just not here. JLSS is seeing to that. Very wise stroke of an angry pen.

[Eagle1993]

2 hours ago, ThenNow said:

Perhaps, but this is a matter of her knowing foxes aren’t good guards for henhouses. (I guess ferrets are fine.) Judge Houser is going to be vetting claims and sniffing out fraud, with the hammer of penalties and prosecution. JLSS wants no self interested parties - or those with something to hide - to obstruct the process from tip to tail. The STAC has plenty of advisory and oversight influence in other matters, just not here. JLSS is seeing to that. Very wise stroke of an angry pen.

From her ruling:

... The nomination of retired Judge Hauser together with the changes to the oversight authority of the STAC go a long way to allay concerns raised by the Certain Insurers.  Nonetheless, the record supports the implementation of strong fraud prevention measures in connection with review of Direct Abuse Claims. ..."

she goes on

"...While no one questions the integrity of the proposed Settlement Trustee, it is appropriate, generally, and in this case in particular given the record, to require that the Settlement Trustee engage in a process that will ferret out any fraudulent claims.... Those procedures will be presented to the court.  The STAC will have no consent rights or veto rights with respect to the proposed procedures.  In addition to disallowance of a claim, penalties may include seeking the prosecution of the claimant or claimant's attorney for presenting a fraudulent claim in violation of 18 U.S.C. 152 and seeking sanctions from the court."

She doesn't trust the STAC or law firms with respect to vetting claims.  She brought up how lawyers backpaddled supporting claims with their signature.  So, she doesn't want anyone with self interest in charge of the process any more.  It was a great move for non fraudulent claimants.  

[ThenNow]

18 minutes ago, Eagle1993 said:

She doesn't trust the STAC or law firms with respect to vetting claims.  She brought up how lawyers backpaddled supporting claims with their signature.  So, she doesn't want anyone with self interest in charge of the process any more.  It was a great move for non fraudulent claimants.  

"Hello. Um, yeah. This is ___________ your non-CSA expert non-tort and non-bankruptcy lawyer who hired an aggregator and call center to fetch me some BSA claimants. Uh huh. Yes. I know you haven't heard from me since the case was filed, but I was busy with 25 slip and falls, a ton of evictions, 6 domestic disputes and a couple hundred DUIs. So, about that claim of yours. It's taken a really really really long time and I know it's been very rough. In light of the judge's ruling on Friday and some complicated matters she's addressed, my partner and I have spent two minutes thinking about your case and come to an important recommendation. As of this moment, we are strongly recommending you opt for the $3500 expedited payment. Yes. I know what the call center intake person told you. Uh huh. Uh huh. Yup. Yup. Yup. Anyway, about that wonderfully attractive and utterly sensible $3500 speedy pay option..."

[Eagle1993]

Just so it is clear how unlikely the TCJC is an easy fix ... this the judge dedicated an entire section of her opinion to the TCJC settlment.

"Throughout this Opinion, I have noted one exception to the appropriateness of the Scouting-Related Releases, namely, the settlement with TCJC...."

(about Abuse claim releases unrelated to Scouting) "Both Debtors and TCJC argue that jurisdiction exists and that a full release of TCJC is warranted and supported by the evidence."

The judge goes on to show she understands the TCJC and BSA had a unique relationship.  "... It is undisputed that Scouting was the official activity program for young men affiliated with the TCJC beginning in the 1920s and that all boys involved with the church were automatically enrolled in Scouting at age 8."

"...From this, TCJC concludes that every instance of Abuse that a claimant could allege relating to TCJC necessarily occurred in Scouting."

"... I decline to approve the third-party releases over objection because (i) it is unclear that the evidence supports the release, and in any event (ii) the TCJC Settlement stretches third-party releases too far."

She goes on to talk about a letter from TCJC to BSA from 2003 describing various cases, including one with mixed claims (abuse occurred both in scouting & non scouting TCJC events). "...(mixed claim case) shows the fallacy of TCJC's conclusion: while all Abuse that occurred during a Scouting activity might also be TCJC-related, the revers is not necessarily true..... Further, while a Local Council has no mission or business other than Scouting, TCJC clearly does."

She goes on to state the $250M may not be enough to get the releases requested. In the end...

"For these reasons, I decline to approve the TCJC Settlement."

I see almost no path to include the current LDS settlement with scouting only releases.  Since all kids in LDS were in scouting and scouting volunteers were also church leaders, it is nearly impossible to guarantee the abuse only occurred during scouting activities.  I expect we will hear the $250M will be pulled.  The BSA does not need the $250M to fund the plan and the LDS, given the relationship with the BSA, likely have limited benefit to obtain scouting only releases. 

Now, the one issue that could cause delay is if LDS switches to being an opt out CO.  If the LDS believes there is no benefit from being protected from post 1976 claims, they may go the opt out route.  That would preserve some rights against BSA insurance and BSA (through settlement trust).     

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/9156e828-9e46-448c-bdd0-ae41eab0683b_Chartered_Organization_Notice.pdf

So ... if I were the LDS lawyer, I would probably say ... pull back the $250M and become the only Opt Out charter org.  That could be a fairly significant development and the BSA and supporting entities may need to negotiate something to prevent the LDS from going down that route.  (That is how the Catholic Church got a better pre 1976 deal than other COs).  Unfortunately that would lead to some delays.

[T2Eagle]

Although I'm pretty sure it's not part of the record, TCJC has incredibly deep pockets, probably the largest single non profit wealth in the US.  It is reportedly over $100 billion just in financial assets.  Whatever complications their withdrawal would pose to the plan, their victims in non SOL states should still be OK.  Hopefully they would take the opportunity to take care on non SOL victims also.

Edited August 2, 2022 by T2Eagle

[Muttsy]

54 minutes ago, Eagle1993 said:

So ... if I were the LDS lawyer, I would probably say ... pull back the $250M and become the only Opt Out charter org.  That could be a fairly significant development and the BSA and supporting entities may need to negotiate something to prevent the LDS from going down that route.  (That is how the Catholic Church got a better pre 1976 deal than other COs).  Unfortunately that would lead to some delays.

This is no small issue. Start tugging on this little piece of yarn and the entire sweater unravels. It’s likely what happens. Why would LDS stay in for a release of exclusively scouting related abuse only to face an onslaught of lawsuits for abuse not occurring at a camp or activity. Many scenarios involve grooming in scouting leading to abuse outside of scouting, etc. LDS would be better off making a clean break with BSA, becoming an Opt-out charter, keeping its 250M AND its BSA insurance rights. 
 

Now, what do the settling insurers do with their settlements when all current and future claims involving LDS are not fully released and channeled? 
 

LDS is the tail that wags the dog here. 

[skeptic]

4 minutes ago, Muttsy said:

This is no small issue. Start tugging on this little piece of yarn and the entire sweater unravels. It’s likely what happens. Why would LDS stay in for a release of exclusively scouting related abuse only to face an onslaught of lawsuits for abuse not occurring at a camp or activity. Many scenarios involve grooming in scouting leading to abuse outside of scouting, etc. LDS would be better off making a clean break with BSA, becoming an Opt-out charter, keeping its 250M AND its BSA insurance rights. 
 

Now, what do the settling insurers do with their settlements when all current and future claims involving LDS are not fully released and channeled? 
 

LDS is the tail that wags the dog here. 

Other than the history of the LDS with BSA, this is mute.  LDS completely dropped scouting as a church sponsored program and have gone out on their own.  While it became mostly finalized prior to the bankruptcy, it was in the works for almost a decade prior.  So, the conjectures about LDS somehow becoming a different CO type is mute.  

 

[ThenNow]

15 minutes ago, skeptic said:

the conjectures about LDS somehow becoming a different CO type is mute

"Opt out CO" is not a different "CO type." It's a term of status/treatment under the plan and it drives whether key provisions apply or not.

[fred8033]

1 hour ago, T2Eagle said:

Although I'm pretty sure it's not part of the record, TCJC has incredibly deep pockets, probably the largest single non profit wealth in the US.  It is reportedly over $100 billion just in financial assets.  Whatever complications their withdrawal would pose to the plan, their victims in non SOL states should still be OK.  Hopefully they would take the opportunity to take care on non SOL victims also.

Question #1 - TCJC has deep pockets but do those pockets extend to incidents that happen at a specific church temple / specific troop?  I compare it to Catholic churches where collectively they have huge assets, but legally they are very separate.  Diocese are individually incorporated.  Many of the local churches are even not legally owned by the diocese.  Is that similar with TCJC?  Or is there a stronger legal ownership connection to the national TCJC ?  

Question #2 - Sort of still related ... and asked before ... how do insurers settle but the insured still has liability?  If COs like TCJC are not in the settlement and the insurance company is not bankrupt, then TCJC should be able to go after the insurance company that insured those incidents ... it seems like the insurance company won't have full liability protection.

Edited August 2, 2022 by fred8033

[Eagle1993]

3 hours ago, skeptic said:

Other than the history of the LDS with BSA, this is mute.  LDS completely dropped scouting as a church sponsored program and have gone out on their own.  While it became mostly finalized prior to the bankruptcy, it was in the works for almost a decade prior.  So, the conjectures about LDS somehow becoming a different CO type is mute.  

 

3 hours ago, ThenNow said:

"Opt out CO" is not a different "CO type." It's a term of status/treatment under the plan and it drives whether key provisions apply or not.

This is definitely getting deep in the bankruptcy weeds.  I think the path is fairly straight forward if the LDS removes their $250M offer but remains in the plan.  Basically, they would be like any other non Methodist/Catholic CO and be given 12 months to negotiate a settlement.  After that, they could face lawsuits.

It is not clear to me what happens if the LDS pulls that thread, as @Muttsyreferenced, and opts out.  How would insurance companies respond if the largest CO decides to risk post 1976 litigation to keep their insurance rights.  I honestly do not know, but could imagine it is a more difficult conversation than simply removing the $250M from the plan.

Most COs saw scouting as an add on to their normal programing.  The abuser wasn't necessarily a member of the CO and most if not all of the contact between the abuser and youth was through scouting.

The issue with the LDS is that the relationship between abuser and youth likely crossed between scouts and non scout functions of the church.  That makes the scout only releases less valuable to the LDS and could cause them to make decisions that may really disrupt the plan.

I'm sure all parties are meeting to figure this out.  I'm still convinced that there is a path to closure and we are weeks to a few months from closure.