Chapter 11 announced - Part 14 - Plan Effective

[Eagle1970]

I have a good friend involved in the Purdue case (lost his brother).   Though they haven't waited nearly as long as BSA survivors, what a shame it is that they must wait even longer for justice when they reached a deal they agreed to.   And what if it totally falls apart?  Maybe another 10 years?  Or nothing....

Similarly, in our case, there is a possibility that IT falls apart.  If not, how many survivors will "age out" before the courts are finished.  I suspect trust recipients are passing away weekly.

With real rates of inflation, which I believe to be much higher than the CPI, a BSA abuse victim from the early 70's (as am I) might not see 5 cents on the dollar, and even that may be years down the road.  What a travesty!  Meanwhile, my perp is fully protected by the SOL and BSA moves forward.

There are days I wish I never involved myself in this.

[SiouxRanger]

It appears that both audio files and written transcripts of US Supreme Court oral arguments are posted to the Court's website.  The site indicates "posted the same day" as the argument. This will be helpful in studying the questions asked by the Justices.

[MYCVAStory]

5 hours ago, SiouxRanger said:

 

@MYCVAStory has precisely and concisely summed up the current state of the BSA bankruptcy in light of the Purdue case and the Supreme Court's recent action.  The questions asked by the Supreme Court Justices during oral argument in December will be the next, best hint as to which way they are leaning.

I appreciate the compliment.  I'll take them when I can get them!  Been on the phone today with legal people far smarter than I am.  The consensus....if the Supreme Court thought Third-Party releases were such a good idea then it wouldn't have taken up the case.  Not good for the BSA's plan.  Also, this is not a "Sackler-Specific" issue.  It's all about interpretation of the bankruptcy code regardless of whether a wealthy family is involved.  Had it not been the Sacklers it could have been the BSA's case to push this to the Supreme Court.  It's been brewing a long time.  The only way this goes away for the BSA in the interim is if the objections are dropped completely.  This would mean that the two attorneys (representing Guam Survivors and the other various survivors in several States) would need to have their clients compensated at a level so that their Survivors are much better off than other Survivors in this Bankruptcy AND the non-settling insurers who object also drop their objections.  All of that isn't outside the realm of possibility but doesn't seem probable right now.  Who knows.  If I'm Century or The Hartford I'd be trying to rescue this.  What I do know is that there is now a very real possibility that a lot of dominoes could fall next June.  If the BSA's plan is DOA, it would need to re-enter Chapter 11 or throw in the towel and go Chapter 7, Local Councils are again exposed and in "open" states especially, Chapter 11 becomes their reality.  It's all up in the air and shouldn't keep anyone from moving ahead when they can complete their questionnaire but a lot of BSA execs must be asking themselves "What did we just pay over $300 million for?"  I pray this all works out but often in life timing is everything.  The BSA declared bankruptcy too late and has been caught up in an aggressive, and frankly needed, push by the DOJ to get guidance on third-party releases.  This bankruptcy plan is in real peril and Local Councils especially must be pretty damn worried right now.

[InquisitiveScouter]

mene, mene, tekel, upharsin

[PaleRider]

Its to many powerful people associated with Scouts including politicians. Aint no way they are gonna let the BSA get shutdown.And that opinion came from from a trustworthy source.The Boy Scouts case is entirely different from the others. The Boy Scouts has produced fine outstanding leaders.To many important folks are involved with BSA,the ones that weren't abused.They see the BSA as a wholesale bunch that is good for America.This case aint gonna get shutdown.

[SiouxRanger]

5 hours ago, MYCVAStory said:

The consensus....if the Supreme Court thought Third-Party releases were such a good idea then it wouldn't have taken up the case.

It could also mean that the Supreme Court wants to resolve a known conflict among the appellate courts. The Supreme Court recognizing that the conflict has grown to such dimensions that it is "ripe" (not in a purely technically, legal sense) to be resolved by the Supreme Court.

The SCt tends to let conflicts among the appellate courts develop to a point where there has been sufficient exposition of the issues in the lower courts to step in and bring it all to a head and set a rule.

5 hours ago, MYCVAStory said:

Also, this is not a "Sackler-Specific" issue.

Absolutely agree.  More discussion below.

5 hours ago, MYCVAStory said:

It's all about interpretation of the bankruptcy code regardless of whether a wealthy family is involved.  Had it not been the Sacklers it could have been the BSA's case to push this to the Supreme Court.

Again, absolutely agree.

5 hours ago, MYCVAStory said:

The only way this goes away for the BSA in the interim is if the objections are dropped completely.  This would mean that the two attorneys (representing Guam Survivors and the other various survivors in several States) would need to have their clients compensated at a level so that their Survivors are much better off than other Survivors in this Bankruptcy AND the non-settling insurers who object also drop their objections.  All of that isn't outside the realm of possibility but doesn't seem probable right now. 

The SCt taking up the Purdue case hands "advantage" to those parties who oppose releases for non debtors from non-consenting claimants. Those who object to the BSA bankruptcy now find themselves handed a hammer.  Heavy, or light, it is still a hammer.  Competent legal counsel will seek to leverage that hammer as the "market will bear."

5 hours ago, MYCVAStory said:

All of that isn't outside the realm of possibility but doesn't seem probable right now.

Agree.  Not likely that the objectors will be offered an acceptable concession. And even if so, it may not stop a SCt ruling in the Purdue case from affecting a settlement.

5 hours ago, MYCVAStory said:

If I'm Century or The Hartford I'd be trying to rescue this. 

Not so sure what they can do.  Seems likely that both are passengers on the ship and have to ride out the storm.

5 hours ago, MYCVAStory said:

If the BSA's plan is DOA, it would need to re-enter Chapter 11 or throw in the towel and go Chapter 7, Local Councils are again exposed and in "open" states especially, Chapter 11 becomes their reality.

Agree with this paragraph and the balance of the post.

The Purdue case is docketed as:

William K. Harrington, United States Trustee, Region 2, Petitioner, v. Purdue Pharma L.P., et al.

Case/Docket #:  23-24

A synopsis of the legal issue of interest to the SCt, from its website, is:

The parties are directed to brief and argue the following question: Whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.

To my recollection, that is precisely the issue raised by the BSA trustee very early on.

And now, it appears the the SCt is poised to resolve it.

"Watson, step lively-the game is afoot." Holmes.

[Eagle1993]

For BSA sake and the sake of the victims of abuse, I hope this plan can remain intact.  However, I still struggle seeing bankruptcy abused in various ways (shell companies being created by J&J or non debtors like the Slackers avoiding the full weight of their horrible actions).  

I think it is clearly time the SC weighs in on non debtor releases.  They continue to expand.  Given the courts conservative leaning, one could guess that they may not agree as Congress has never authorized non debtor releases (outside of asbestos) and it is clearly not in the constitution.  However, this is not a typical right vs left issue so who knows where the 9 members will fall.  This could make some odd bedfellows.

I really hope the plan remains intact. If it doesn't, I see a decade of council and charter org lawsuits and bankruptcy with primarily lawyers getting rich.

Edited August 12, 2023 by Eagle1993

[Eagle1970]

3 minutes ago, Eagle1993 said:

If it doesn't, I see a decade of council and charter org lawsuits and bankruptcy with primarily lawyers getting rich.

A Missouri Judge recently let a time-barred suit move forward against a summer camp, based on fraud in disclosure, or lack thereof.  So even closed states will have issues.  My troop is Catholic Parish sponsored.  So I can see where that would go if BK fails to settle the issues.  

[SiouxRanger]

41 minutes ago, Eagle1993 said:

I think it is clearly time the SC weighs in on non debtor releases.

When I first read the BSA trustee's objections to non debtor releases, I was persuaded.

I do not expect them (non debtor releases) to be upheld.  That's where I place my marker on this issue. Just my legal judgment.

(Scouting has been of huge importance for me in my youth, and as a parent. The Program is great;  National's handling of abuse issues is a terrible failure. If only we could separate National from the movement's ideals.)

The BSA trustee's legal objections are very serious, legally. And the SCt seems to think so, too.

Edited August 12, 2023 by SiouxRanger
ADDED: "(non debtor releases)" for clarity.

[SiouxRanger]

53 minutes ago, Eagle1970 said:

based on fraud in disclosure

And, for all I have read about National's modus operandi in these matters, and local councils' complicity therein, councils are now complicit in that fraud in disclosure and have huge legal liability exposure.

Councils took the easy course mandated by National and may well pay the price.

[BadChannel70]

"This would mean that the two attorneys (representing Guam Survivors and the other various survivors in several States) would need to have their clients compensated at a level so that their Survivors are much better off than other Survivors in this Bankruptcy AND the non-settling insurers who object also drop their objections.. "

What about survivors like myself who voted "no" on the plan because we didn't agree with the 3rd party releases. I saw no reason why sponsoring organizations should receive the benefits of a release. And likewise with the local councils. 

And their actions have more than confirmed my beliefs they only care about the bank account balance sheet. To date, my sponsoring organization has contributed $0 dollars to the trust, but they have the gall to ask the BK court for $1,000,000.00 to recoup their legal fees. My specific local council's contribution amounts to approximately $6,000.00 per survivor. Cut that $6,000.00 by 40% for my attorney fees. And survivors like me are force fed this excrement while being told we would receive value in return. What value? Who is really benefiting here.

My hope is SCOTUS adds checks and balances to these 3rd party releases requiring more consent from claimants instead of let's get as many 3rd party releases as possible.

Edited August 14, 2023 by BadChannel70

[MYCVAStory]

19 minutes ago, BadChannel70 said:

What about survivors like myself who voted "no" on the plan because we didn't agree with the 3rd party releases. I saw no reason why sponsoring organizations should receive the benefits of a release. And likewise with the local councils. 

You point out well the problem with addressing mass torts through bankruptcy.  It reduces every individual to one "class" and sacrifices individual rights for collective agreements.  That's what the Supreme Court has to decide since to this point different circuits have ruled differently.  It's a shame that the issue wasn't long resolved before now. 

[Eagle1970]

I was a strong NO on this.  When I originally was working on my Proof, I called in for some information and was told that it didn't matter that my state was closed SoL, because it was a bankruptcy.  Also was told "everyone would be treated equally".  Of course I came to find out that the SoL absolutely mattered, as my state is 10% and along with that, we clearly are not being treated equally.  However, I have come around, primarily because the victims are aging and dying off, so I just concluded that some justice for some was better than no justice for any.

[fred8033]

On 8/11/2023 at 8:36 PM, Eagle1993 said:

For BSA sake and the sake of the victims of abuse, I hope this plan can remain intact.  However, I still struggle seeing bankruptcy abused in various ways (shell companies being created by J&J or non debtors like the Slackers avoiding the full weight of their horrible actions).  

I think it is clearly time the SC weighs in on non debtor releases.  They continue to expand.  Given the courts conservative leaning, one could guess that they may not agree as Congress has never authorized non debtor releases (outside of asbestos) and it is clearly not in the constitution.  However, this is not a typical right vs left issue so who knows where the 9 members will fall.  This could make some odd bedfellows.

I really hope the plan remains intact. If it doesn't, I see a decade of council and charter org lawsuits and bankruptcy with primarily lawyers getting rich.

This bankruptcy is one of the few reasons I still read this board.  I'm extremely interested in the result though I think it's years before we can look in hindsight.  

@Eagle1993 ... I have the same thoughts.  I want the plan intact to allow scouting to move on.  I don't pretend there is any justice for the victims.  The settlement offers a token, but not justice.   

BUT ... non-consensual non-debtor releases is wrong and produces bad justice.  IMHO, this case really should be thousands of individual cases against councils, charters and insurance companies.  BSA should proceed as best possible via Chapter 11 or 7.  Beyond that, it's about individual court cases ... OR the next organization also having to file bankruptcy.

I really fear BSA paid lawyers from both sides massive amounts to reach a settlement that won't survive.  

 

Edited August 14, 2023 by fred8033

[SNEScouter]

On 8/11/2023 at 4:00 PM, MYCVAStory said:

This bankruptcy plan is in real peril and Local Councils especially must be pretty damn worried right now.

Respectfully, I must strongly disagree with your assessment of Purdue's impact on the BSA plan.

There is a HUGE difference between BSA and Purdue, which is that BSA's plan has already gone into effect.  Purdue's plan is now stayed and cannot go into effect, if at all, until after SCOTUS rules on the validity of non-consensual third-party releases.  (I agree June '24 is the likely timeframe for that decision.)

We are in unchartered territory here, and so a lot of permutations are possible.  BSA Plan Supporters are not happy to see SCOTUS reviewing nonconsensual third-party releases. 

That said, IMHO, the most likely outcome is that the Third Circuit receives all briefs and decides that the appeals of Lujan, D&V, Certain Insurers, etc. are equitably moot.  Briefing has already begun and so it seems like the Third Circuit ruling could come before a SCOTUS ruling in June '24, but who knows.  Therefore, even if there was reversible error in the BSA Plan approvals, the Third Circuit will likely find that it is powerless to reverse those errors because the plan has already gone into effect.  BSA is now a reorganized debtor and lots of assets have been paid to the Settlement Trustee in exchange for the third-party releases (largely by insurers and Local Councils).  The Settlement Trustee has already started incurring substantial operating expenses against those assets, and might very well start paying at least the expedited $3500 claims before either the Third Circuit or SCOTUS issues any rulings.  There are a lot of other aspects of the plan which also depended (at least indirectly) upon the third-party releases.  It would be virtually impossible for an appeals court to unscramble that egg. 

So even if SCOTUS ultimately finds in Purdue that nonconsensual third-party releases are not permissible, it does not follow that BSA's plan will be imperiled or affected by that ruling.  Today, and certainly by June '24, it will be a practical impossibility to reverse the implementation of BSA's plan of reorganization.  When Plan Supporters file their Third Circuit briefs in the relative near future, you can expect to see a lot of arguments like the above under the heading of equitable mootness.

By the way, equitable mootness is virtually certain NOT to be in issue in Purdue.  Because of the SCOTUS decision to stay the Purdue plan pending SCOTUS's ruling, the Purdue plan will not go into effect before SCOTUS rules, and equitable mootness will not be at issue.  So the Third Circuit is going to apply existing law on equitable mootness, which as I understand tend to favor overruling the various appeals.

Edited August 14, 2023 by SNEScouter