[Moo] Details on The Lawsuit, and some comments
Lisa Mitchell
cframwymarc at hotmail.com
Sun Feb 5 15:22:16 PST 2012
I'm working on a couple of scenarios.
Ceridwen
Exchequer
Date: Sun, 5 Feb 2012 15:41:22 -0500
From: hourumiyamoto at gmail.com
To: moo at lists.stierbach.org
Subject: Re: [Moo] Details on The Lawsuit, and some comments
And so because of the actions of one oshirinoana (asshole in Japanese), everyone in the sca gets (censored). Lovely, so what's the plan, I know we as a barony aren't going to sit idly by, I personally want to get this monies owed business out of the way. Game plan?
On Feb 5, 2012 10:41 AM, "Maven" <sk8maven at yahoo.com> wrote:
Copied from SCA-Bridge-Chat (Barony of the Bridge, East Kingdom):
The SCA has announced they have settled the lawsuit. The original
news release can be found: http://sca.org/BOD/announcements/settlement.html
The questions below cover the article.
SCA Settlement FAQ
What was the lawsuit about?
Actually, there are two lawsuits, one filed against the SCA and one
filed by the SCA to protect its interests and enforce its insurance
policies.
Several years ago, a former SCA member named Ben Schragger was
convicted of the sexual abuse of multiple children that he allegedly
met through the SCA from 1999-2001. He was sentenced and is
currently serving a 62-year prison sentence. The Board, of course,
permanently revoked his SCA membership.
After an initial civil lawsuit was filed and dismissed in 2007
against the Society for Creative Anachronism, Inc. ("SCA"), a second
civil lawsuit was filed in 2009 claiming that the SCA should be held
liable for Mr. Schragger's wrongdoing. The lawsuit also asked that
the SCA be held liable for allegedly not having effective policies
in place at that time to protect these children. Three SCA
participants who were local officers during this time were also
named as defendants in the lawsuit, and as officers of the
corporation, had the right to be indemnified against any ensuing
legal costs. The Plaintiffs in the lawsuit demanded Seven Million
Dollars ($7,000,000.00) in damages from the SCA.
The SCA immediately tendered the lawsuit to its insurance
companies and one insurer agreed to cover the SCA's attorney's
fees incurred in defending the lawsuit. All other insurers refused
to cover defense fees or indemnify the SCA in the event of a
settlement or judgment.
In 2010, both insurance carriers threatened to file suit in
Federal Court. They wanted a Federal Court judge to rule that the
insurance policies did not cover the 2009 lawsuit and did not
cover the defense or indemnification of the SCA or its officers in
the 2009 lawsuit. As a protective measure, it was necessary for
the SCA to file a pre-emptive lawsuit against both insurance
carriers, demanding payment under the policies. In this lawsuit
the SCA demanded coverage in California, where the SCA is
headquartered. The SCA has been required to pay the attorney
representing the SCA in this lawsuit against the insurance
carriers. It stands to reason that payment of these fees has left
the SCA in a precarious financial position.
Why is our insurance company not accepting responsibility for
covering our loss?
The insurance carriers have offered a number of different reasons
for their position that the 2009 lawsuit should be excluded from
coverage under the policies. The SCA does not believe that any of
these reasons have any merit and is continuing its suit against
the non-paying insurance carrier. A trial date has been set in
May, 2012.
Which lawsuit is being settled by this settlement payment?
The 2009 lawsuit against the SCA, in which plaintiffs asked for
$7,000,000, will be fully and finally settled and dismissed with
the settlement payment of $1,300,000.
How was the settlement arrived at?
After many years of legal process, in October of 2011, the victims
agreed to settle for $1,300,000.00. This settlement was promptly
presented for approval to both of the SCA's insurance carriers.
The acceptance of this offer provides the SCA with the assurance
that there will be no further lawsuits brought by the victims of
Ben Schragger and thus brings to a close the financial and legal
risk to the Kingdoms, officers, and the SCA as a result of the
lawsuit. One insurance carrier agreed to pay $450,000 of the
settlement amount. The other insurance carrier has refused to
contribute to the settlement. Therefore, the SCA has been forced
to pay the remainder of this settlement, $850,000. This brings the
total cost to the SCA for both the settlement and the related
legal fees to over $1,000,000.
Are we sure there will be no future lawsuits related to the
subject matter of the 2009 lawsuit?
We cannot be 100% positive, but we know that the plaintiffs in the
2009 lawsuit are all of the victims that were named in the police
reports.
If the SCA is not guilty of any wrong-doing, why are we
settling the 2009 lawsuit instead of continuing to fight the
charges?
The simple answer is that we cannot afford it. Like any other
corporation, the SCA must make decisions about the most effective
use of the money it has, and the financial impact of the lawsuit
is effectively diverting a large amount of funds that could be
much better used to serve the SCA by fostering our mission of
researching, teaching and experiencing aspects of the Middle Ages
and Renaissance. The SCA is not admitting to any wrong-doing by
settling the 2009 lawsuit, and the settlement and release
agreement clearly state that fact. Settling the lawsuit now, for a
fraction of the original demand, will allow the SCA to move
forward and to concentrate on rebuilding our finances and
developing initiatives that can make the SCA a healthier
organization with which to support our mutual dreams.
How much has the SCA paid in legal fees, and how much will it
have to pay before the lawsuit against the insurance carrier is
decided?
Costs arising from the 2009 lawsuit, the settlement and the
associated legal fees have surpassed $l,000,000. The SCA must also
anticipate additional legal fees as it pursues the non-paying
insurance carrier and seeks judgment in May 2012 that the
insurance carrier must pay the SCA's expenses and those of the
three local officers for the 2009 lawsuit. There is no way to know
with certainty how much the SCA will still need to pay, but those
costs will probably be in the tens of thousands of dollars.
Why is the SCA asking the Kingdoms for money?
The SCA corporate office simply does not have this much in cash,
assets or cashable dollars. While the corporate office of the SCA
has managed the burden of our shared liability to date, it has
been the entirety of Society for Creative Anachronism, Inc. that
has been liable for damages under this lawsuit. In order to the
meet the terms of the settlement without financially crippling the
SCA, its subsidiaries or any single branch, it has thus become
absolutely necessary that each Kingdom located in whole or in part
in North America, both Pennsic and Gulf Wars, and the subordinate
Corporate level checking accounts contribute an equal percentage
of their separate total cash assets to the settlement and
associated legal fees. The other wars will contribute as part of
the Kingdom through which they report.
Why are all the Kingdoms liable?
The 2009 lawsuit was brought against the Society for Creative
Anachronism, Inc. and thus included all of the SCA. In order to
meet the terms of the settlement without crippling the SCA or any
single Kingdom, all Kingdoms will be required to contribute.
Are branches outside North America expected to contribute?
No, Kingdoms and affiliates outside of North America are not being
required to contribute to the settlement (although voluntary
donations would be gratefully accepted!). First, the affiliates
were not named in the lawsuit. Second, these branches were
incorporated under different tax IDs and non-U.S. jurisdictions,
with their own Boards of Directors and responsibility for their
own financial matters and insurance policies. With regard to
Canadian Provinces, the SCA is incorporated as a foreign
non-profit corporation so that Canadian branches are part of the
overall Society for Creative Anachronism, Inc.
Are the subsidiaries exempt from having to contribute?
No. At the time of the filing of the lawsuit, the subsidiaries did
not exist. All kingdoms were branches directly under the umbrella
of the Society for Creative Anachronism, Inc. Regardless, all
subsidiaries are wholly-owned by the SCA, and as the sole owner,
the SCA has the authority to use or direct the use of the
subsidiaries' assets for the benefit or objectives of the SCA as a
whole.
Why are Pennsic and Gulf War singled out among the
inter-Kingdom wars?
Pennsic and Gulf War both report independently to the Society
Exchequer's office and have separate bank accounts that do not
fall under a Kingdom's authority. All other inter-Kingdom wars
will contribute as part of the Kingdom through which they report.
Will the SCA branches that are contributing to the settlement
get their money back if the SCA wins the lawsuit against the
insurance company?
Absolutely! If the SCA prevails in its lawsuit against the
non-paying insurance carrier, any funds recovered will be
distributed to the kingdoms, on a pro rata basis, after payment of
any remaining legal fees.
Will the funds collected be kept separately from the general
SCA funds?
The settlement funds will not be kept separate because a check
will be cut almost immediately in order to meet the deadline for
payment of the settlement. The funds that will go toward any
future legal fees will be kept in a separate checking account,
earmarked for use only in paying the SCA's legal fees.
Are there penalties if Kingdoms or the named inter-Kingdom
events don't produce their share of the funds to SCA?
Yes. The bank accounts owned by the various U.S. branches are,
directly or indirectly, legal assets of the Society for Creative
Anachronism, Inc., and the SCA would have the right to freeze all
funds in such accounts, although it would take any such step very
reluctantly.
What has the SCA done to prevent this type of problem from
happening in the future?
The SCA has worked to improve its policies and institute new
policies where needed. Some of the new policies include the
two-deep rule and criminal background checks on anyone wishing to
administer youth activities. The Board will be addressing
long-range plans for improving its governance structure during
2012, after consultation with internal and outside counsel, as
well as the SCA's financial advisors.
How was the amount each branch would contribute determined? Who
determined it?
The SCA's financial advisors conducted extensive financial
evaluations, taking into account financial reports from all SCA
branches. Data was collected from the 2010 Consolidated Doomsday
reports and the most recent Kingdom level quarterly reports to
determine the estimated available cash assets held in the SCA and
its subsidiaries. Using that total, a calculation was performed to
determine what percentage of funds each Kingdom had in
relationship to the total amount of cash needed. The percentage
per Kingdom was used to calculate the amount each Kingdom would
have to contribute to the settlement. To be fair, each Kingdom
will be paying the same percentage of its assets. That percentage
is 18% of the cash assets each branch had as of the last relevant
financial report filed by the branches and Kingdoms. The analysis
was presented to the Board of Directors, who approved this method
of calculating the contributions from each Kingdom.
In general, how will the contribution of funds work?
Each Kingdom will send to the Corporate Office an amount equal to
18% of all monies in the checking accounts of all branches within
that Kingdom as of the last relevant financial report filed by the
branches and Kingdoms. Each Kingdom will have discretion in
determining how it will collect the funds internally, from each of
its branches.
Does each branch have to contribute the same amount? What if
another branch holds a branch's money such as a Barony holding
funds for a Canton?
Each Kingdom will be required to contribute the same percentage of
the combined total cash assets of each of its branches as of the
last relevant financial report filed by the branches and Kingdoms.
Each Kingdom will be given great flexibility in how it raises this
amount from the branches under its authority. Your Monarchs,
Seneschal and Exchequer will make the determination of how the
gathering of funds will be handled within your Kingdom, and the
Corporate Treasurer and Society Exchequer will work with each
Kingdom to facilitate the gathering of the funds.
Is each branch going to have to send their money to the
corporate office?
No. Each branch will need to send its contribution to its Kingdom
Exchequer.
How is the money going to be collected from each branch?
Each Kingdom will receive an invoice from the corporate office
stating the amount of money it is required to contribute. It is
the responsibility of the leadership in each Kingdom to determine
how to collect the money from each of its branches. The Corporate
Treasurer and the Society Exchequer will work with the Kingdom
Exchequers to discuss the best options for each Kingdom.
How soon does the money have to be sent to the corporate
office?
The due date for each invoice that will be sent to the Kingdoms
will be 10 business days from receipt of the invoice. We do
realize that some Kingdoms may not have the full amount
immediately available within the Kingdom account, so the corporate
office will work with these particular Kingdoms to discuss
different methods of collecting the funds and/or making the
required payment.
What happened to the $600K the corporate office had in reserve
from previous years?
Between rising costs in operating expenses, the loss from
investments due to the general global economic downturn, and the
expenses of the 2009 lawsuit, this money has been depleted.
What if I want to hold a fundraiser or make a personal
donation?
You are free to do so, and the SCA deeply appreciates your efforts
and your support of our shared organization. We would suggest that
you make any such donations directly to your Kingdom to help it
pay the amount it will be required to contribute as its part of
the SCA's obligations in the settlement.
Will the Board be holding any meetings or town halls where we
can talk face-to-face to ask questions and discuss this?
Yes. Meetings have already been held for Kingdom Royalty,
Seneschals, and Exchequers. We will also be holding town halls at
Gulf War, Estrella and Pennsic. Check the war schedules for dates
and times. Your Crown, Coronet and Kingdom Seneschal and Exchequer
have all been briefed, understand the obligations involved and can
answer many of your questions. We recognize you will naturally
have many questions, and we ask that these be addressed to the
appropriate Kingdom Ombudsman, who will endeavor to respond as
soon as possible. While we are committed to getting get back to
you as quickly as possible, we do ask for some patience and
understanding as this process is extremely difficult.
The Board of Directors, Corporate officers, and Society officers
are doing everything possible to resolve this issue to the best
outcome possible. Your understanding and support of our mutual
responsibilities are deeply and fervently appreciated as we move
forward.
-------------------------------------------------
Comments (Medhbhin):
This is good news and bad news. It's good news that the Looming
Doom of the Lawsuit has been settled at a discount rate. It's bad
news that the monies must be raised so broadly in such a short
time, and will seriously impact groups and people that had
absolutely nothing to do with the original crime.
It is also bad news that we are finding out that insurance
carriers cannot be trusted to live up to their ends of their
contracts with us. (Or is this really news?)
It is bad news that the Board now has all the excuse it ever
needed to continue to increase the financial burden on individual
members.
It is bad news that they are apparently not considering that it is
WAY WAY WAY past time to think about radical reorganization of the
SCA - at the very least, separation into individual Kingdoms under
an overall nominal umbrella organization. Better still would be
reversing the current structure - from top-down to bottom-up. In
neither of those cases would there have been the perception of one
single huge pot of money to be accessed via lawsuit - which is
what has caused so much of the trouble. (Tip of the turban to Duke
Cariadoc, who said such things for years before his worst
forebodings came true, and who has had the graciousness not to
shout, "I TOLD YOU SO, YOU MORONS!" all over every available
communications source.)
_______________________________________________
Moo mailing list
Moo at lists.stierbach.org
http://lists.stierbach.org/listinfo.cgi/moo-stierbach.org
_______________________________________________
Moo mailing list
Moo at lists.stierbach.org
http://lists.stierbach.org/listinfo.cgi/moo-stierbach.org
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.stierbach.org/pipermail/moo-stierbach.org/attachments/20120205/c437a560/attachment-0003.htm>
More information about the Moo
mailing list