[Moo] Details on The Lawsuit, and some comments

[Flaithri O'Cearnaigh]

Thank you for your support. I know that all the support that Her Excelency and I have received as well as the support recieved by Their Majesties and Highnesses has reaffirmed the pride we all feel in the Barony, Kingdom and the Society.

If you wish to make a voluntary private donation directly to the Kingdom you may do so via the Kingdom Exchequer. Donations made directly to SCA Inc. will not help reduce the Kingdom liability. So if you want to help by making private donations, please contact the Kingdom Exchequer.

Please also keep in mind that all donations are voluntary. As we proceed through the next months business meeting cycle, we will be discussing this at all of the branch meetings. Any donations that are being considered from any branch is voluntary and subject to the financial policy of the branch. This includes the $400 donation that has been requested from the Baronies of the Kingdom. 

Her Excelency and I will be at both Canton meetings this month and the Baronial Meeting in March to answer any questions we can. We are also available by email and phone if you have questions or concerns that you wish to discuss outside the meetings.

Baron Flaithri

On Feb 6, 2012, at 6:32 AM, "Annie Hamel" <ahamel77 at gmail.com> wrote:

> Here, here!  We are also willing to contribute as the SCA has
> tremendously enriched our lives for the past 6 years.
> 
> Lady Heloise and Lord Alexandre
> 
> On Sun, Feb 5, 2012 at 11:33 PM, Jonathan Blaine
> <hourumiyamoto at gmail.com> wrote:
>> 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/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
>>> 
>>> _______________________________________________
>>> 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
>> 
> 
> 
> 
> -- 
> Purpure, an open scroll bendwise and on a chief wavy argent three
> fleurs-de-lys azure.
> _______________________________________________
> Moo mailing list
> Moo at lists.stierbach.org
> http://lists.stierbach.org/listinfo.cgi/moo-stierbach.org