[Moo] Details on The Lawsuit, and some comments

[Jonathan Blaine]

I read that afterwards, but still feel the need to help. Even though the
kingdom can write the check, it still puts a dent in the funds. I
personally want to help rebuild those funds.
On Feb 5, 2012 6:22 PM, "Lisa Mitchell" <cframwymarc at hotmail.com> wrote:

>  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/announcement**s/settlement.**
> html <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.)
>
>
>
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