Boy Scouts preliminary voting results in; tort claimants seek better settlement

By Sarah Lizee

Olympia, Wash., Jan. 5 – Boy Scouts of America (BSA) detailed the preliminary voting results for its Chapter 11 plan in a tabulation summary filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The holder of $80.76 million of 2010 credit facility claims, the holder of $61.54 million of 2019 revolving credit facility claims, the holder of $40.14 million of 2010 bond claims, and the holder of $145.66 million 2012 bond claims each voted to accept the plan.

Meanwhile, 72 holders, or 98.63% in number, of $1.15 million, or 99.97% in amount, of convenience claims voted to accept the plan, while one holder, or 1.37% in number, of $395, or 0.03% in amount, voted to reject the plan.

Also, 150 holders, or 98.68% in number, of $26.55 million, or 100% in amount, of general unsecured claims voted to accept the plan, while two holders, or 1.32% in number, of $2.00, or 0% in amount, voted to reject the plan.

Four holders, or 66.67% in number, of $4.00, or 66.67% in amount, of non-abuse litigation claims voted to accept the plan, while two holders, or 33.33% in number, of $2.00, or 33.33% in amount, voted to reject the plan.

And, 39,401 holders, or 73.12% in number, of $39,401, or 73.12% in amount, of direct abuse claims voted to accept the plan, while 14,487 holders, or 26.88% in number, of $14,487, or 26.88% in amount, voted to reject the plan.

Lastly, 4,607 holders, or 63.99% in number, of $4,607, or 63.99% in amount, of indirect abuse claims, voted to accept the plan, while 2,593 holders, or 36.01% in number, of $2,593, or 36.01% in amount, voted to reject the plan.

On Wednesday afternoon, the official tort claimants' committee issued a press release saying the plan had failed to garner enough votes from eligible voters.

“The vote is one of the primary gating items the bankruptcy court will consider when asked to approve the plan,” the committee said in the release.

“Survivors understood that the plan does not adequately compensate them,” John Humphrey, co-chair of the committee, said.

“Thousands of survivors heard the TCC's message: vote ‘no’ and the TCC will work its hardest to get a better settlement, including the best protection for children in the BSA's scouting programs,” John Humphrey, co-chair of the committee, said.

The committee said it has already started negotiating what it hopes will develop into a satisfactory plan for all.

As previously reported, the plan confirmation hearing was recently moved to Feb. 22 from Jan. 24 following several changes made to the plan.

Among other changes, the survivor settlement fund has grown to more than $2.6 billion following the BSA’s entry into a settlement agreement with another of its primary insurers.

The plan provides the framework for global resolution of abuse claims against the debtors, related non-debtor entities, and local councils, as well as any participating chartered organizations and contributing chartered organizations and settling insurance companies that may make contributions to the settlement trust for the benefit of survivors of abuse.

According to the most recently filed plan, holders of other priority claims will receive payment in cash in full or other treatment leaving the claims unimpaired, including reinstatement.

Holders of administrative expense claims, professional fee claims and priority tax claims will be paid in full.

Holders of other secured claims will receive payment in full in cash, reinstatement of their claims, or the collateral securing their claims.

Holders of class 3A 2010 credit facility claims will receive a claim under the restated credit facility documents in an amount equal to the amount of such holder’s allowed 2010 credit facility claim.

Holders of class 3B 2019 revolving credit facility claims will receive a claim under the restated credit facility documents in an amount equal to the amount of such holder’s allowed 2019 revolver claim.

Holders of class 4A 2010 bond claims will receive a claim under the restated 2010 bond documents in an amount equal to the amount of such holder’s allowed 2010 bond claim.

Holders of class 4B 2012 bond claims will receive a claim under the restated 2012 bond documents in an amount equal to the amount of such holder’s allowed 2012 bond claim.

Holders of convenience claims will receive cash in an amount equal to 100% of their claims.

Holders of general unsecured claims will receive, subject to their option to elect convenience claim treatment, their pro rata share of the $25 million core value cash pool up to the full amount of their claims.

Holders of non-abuse litigation claims will, subject to their ability to elect convenience claim treatment, retain the right to recover up to the amount of their claims from available insurance coverage or the proceeds of any insurance policy, including any abuse insurance policy or non-abuse insurance policy, applicable proceeds of any insurance settlement agreements, and co-liable non-debtors, if any, or their insurance coverage. If holders of non-abuse litigation claims fail to recover in full from these sources, they may elect to have the unsatisfied portion of their claims treated as a convenience claim and receive cash in an amount equal to the lesser of the amount of the unsatisfied portion of the claim and $50,000.

The settlement trust will receive, for the benefit of holders of abuse claims, the BSA settlement trust contribution, the local council settlement contribution, the contributing chartered organization settlement contribution, the participating chartered organization settlement contribution, and insurance settlement contributions. The BSA said that the total compensation fund for the more than 82,500 sexual abuse survivors is more than $2.6 billion.

Each holder of direct and indirect abuse claims will have their claims permanently channeled to the settlement trust.

Interests will be canceled.

Boy Scouts of America is based in Irving, Tex. It filed bankruptcy on Feb. 17, 2020 under Chapter 11 case number 20-10343.

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