What Happens if BSA Goes Chapter 7.

[HashTagScouts]

3 hours ago, RememberSchiff said:

Bad wording on my part. Chapter 7 would end the corporation and IMHO, the Congressional Charter for a specific, non-existent entity would be...moot?

If new Scouting organizations rose, would the BSA Congressional Charter automatically transfer to any of them? IMHO no. Whatever the name, it/they would be a different corporations and I doubt any new Congressional Charters would be approved. The 1992 debate of ending Congressional Charters might resume in Congress.

Not a lawyer, just another $0.01.

Considering the cloud under which the dissolution would occur, I couldn't see it gaining massive support to give CC recognition to a new organization(s) immediately. I think you'd have to see the new organization(s) prove themselves over several years to get to a CC stage.

I personally don't think we'd see just one cohesive organization rise from the ashes. I think tribalism will direct there being multiple. Those who don't agree with there being a faith requirement could splinter, those who still don't agree with girls and boys being in the same organization could splinter, those who believe there should be mostly outdoor program/requirements versus those who don't potentially splinter, etc. The other scouting organizations out there today would likely receive marginal gains from BSA demise. I think they have not grown significantly to this point because the BSA name has been more recognizable, and Eagle Scout has certainly been more recognizable. Many not involved in Scouting have at least a basic positive reaction to hearing someone say they are an Eagle Scout. How many even know what the top award in TrailLife is called?   

[yknot]

6 hours ago, fred8033 said:

If I played the game, what would happen if BSA went chapter 7 ... 

My big fear is that victims of the current settlement would get less and it would take much longer.  

• Chapter 7 means no victim settlement and no funds anytime soon.  
• Chapter 7 means hundreds of millions were spent trying to get a settlement, without success.  
• A new set of lawsuits would start against the insurance companies. 
  • BSA chapter 11 bankruptcy pulls everyone together into a settlement.  Without that, I could easily see every insurance company going on their own.  The chapter 11 bankruptcy creates the opportunity for a collective liability shield.  Without BSA needing that shield, I can't believe insurance companies would get a liability shield ... and thus I can't see insurance companies in a big settlement.  
  • New trials, negotiations, etc.  Probably years down the road.  
  • Possibly outside bankruptcy courts? 
  • Company by company lawsuits?  State by state?  Insurance companies might save money by having it fought in many different venues over decades.
• What little could be collected from BSA in bankruptcy could go to higher priority debt owners.
  • BSA retirement pension program would be in trouble ... especially now as I read some of that money was pulled in ... ??? ... I have been avoiding asking.  
  • Government owned pension guarantee company might be a debt owner at a higher priority level than victim lawsuits.  

I wonder if it would be better for victims if BSA did enter Ch. 7. There certainly would be a scramble among the first in line. Many of those cases, though, were among the most egregious and if they went to court would likely result in judgements creating new high thresh holds for child sexual abuse victims. The ensuing media coverage would also put a focus on the issue in general whereas right now with Ch. 11 it seems to be getting swept under the rug and many of these victims will never be heard from. If the reality in Ch. 11 is that most victims are going to get a check for $37 anyway, I wonder if the validation, in terms of some high profile cases, media coverage, and large judgements under Ch. 7, would be better? 

[fred8033]

5 hours ago, RememberSchiff said:

Bad wording on my part. Chapter 7 would end the corporation and IMHO, the Congressional Charter for a specific, non-existent entity would be...moot?

If new Scouting organizations rose, would the BSA Congressional Charter automatically transfer to any of them? IMHO no. Whatever the name, it/they would be a different corporations and I doubt any new Congressional Charters would be approved. The 1992 debate of ending Congressional Charters might resume in Congress.

Not a lawyer, just another $0.01.

Until something like the 1992 congressional debate (forgot about that) was passed as law, BSA ... even if liquidated and had no employees or records ... could be spun back up.   

We think of the Congressional Charter as honorific ... and it mostly is ... but it adds a nebulous legal state that can be used to re-hydrate a failed BSA.

1 hour ago, HashTagScouts said:

... because the BSA name has been more recognizable ...

That is my point.  Congress doesn't have to give another company a congressional charter.  BSA has perpetual existence until the charter is withdrawn by congress passing another law.

A patriotic president could effectively spin up BSA without a law or any action and continue to use the charter.  I would.  If BSA didn't exist for five years, it would be a huge political win for that President and gives that president the clout to talk about things being done for youth and for the outdoors.  

 

 

 

 

Edited September 7, 2022 by fred8033

[fred8033]

1 hour ago, yknot said:

I wonder if it would be better for victims if BSA did enter Ch. 7. There certainly would be a scramble among the first in line. Many of those cases, though, were among the most egregious and if they went to court would likely result in judgements creating new high thresh holds for child sexual abuse victims. The ensuing media coverage would also put a focus on the issue in general whereas right now with Ch. 11 it seems to be getting swept under the rug and many of these victims will never be heard from. If the reality in Ch. 11 is that most victims are going to get a check for $37 anyway, I wonder if the validation, in terms of some high profile cases, media coverage, and large judgements under Ch. 7, would be better? 

I sympathize.

I also have contempt for the legal process being used in this bankruptcy.  Even before the victim infomercials, this has been a boon-doggle and a money grab.  There is no way this bankruptcy will make victims whole.  The awareness was raised years / decades ago.  Nothing is gained except re-opening old wounds yet again for several more years. 

I'd rather see BSA go thru bankruptcy on their own.  BUT, at this point, the money has been spent on the settlement with a gamble of huge payouts by insurance companies and co-defendants.   ... BSA on it's own has little to give defendants in a chapter 11 or chapter 7 now.  ... The whole process is disgusting.

At this point, the best is for the process to reach a conclusion. 

I fear chapter 7 would mean another ten years of lawsuits, etc.   ... victims getting little ... the legal process eating the assets. 

Edited September 7, 2022 by fred8033