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The U.S. District Court Has Affirmed Bankruptcy Court Approval of the BSA Reorganization Plan

March 28, 2023  ·  By HM&M

Today, the District Court affirmed the Bankruptcy Court. This represents a major step towards establishing the Settlement Trust and processing the claims of victims of BSA abuse. In Bankruptcy Court terms, the processing of claims can begin when the Plan “goes effective.” In order for this Plan to “go effective” the District Court needed to affirm the Bankruptcy Court. That occurred today.

Nevertheless, parties still have the opportunity to appeal the District Court’s findings to the Federal Appellate Court. Typically, appeals must be filed within 30 days of today’s order. We have no doubt that certain parties will appeal. However, they will have to win a Motion to Stay (delay) the Effective Date of the Plan in order to prevent the Settlement Trust from being established. We will let you know if they file such a Motion and, if they do, when it will be heard.

In affirming the Bankruptcy Court, the District Court noted the extraordinary nature of the hard fought proceedings:

Perhaps nowhere is the extraordinary nature of this case more apparent, however, than in the efforts of the many constituencies and their professionals over the past several years to negotiate and confirm a plan. During three years of Chapter 11 proceedings there were thousands of hours of mediated negotiations among more than a dozen stakeholder groups, fifty-nine hearings, a twenty-two day confirmation trial, and 300 pages of opinion and supplemental findings. The Plan was supported by every estate fiduciary and nearly every organized creditor group-a commendable result for such a lengthy, contentious, and “emotionally charged” proceeding.

This is a major step forward. But please keep in mind that this is a truly unprecedented case and the Settlement Trust will have major work to do in advance of processing any claims. It will take time for the Trustee to establish protocols, set up the technology to process claims, and begin the processing of 82,000 unique claims. As the Settlement Trust Advisory Committee Chairman, we can assure you Chris Hurley will push as hard as possible to move things forward quickly and efficiently.

A copy of the District Court’s opinion can be found here: OPINION

We want to clarify that there is no set date when payments will be made. When we have an idea on what to expect for that process, we will let you know.


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