Boy Scouts will lobby on bill to curb tactics used in bankruptcy proceedingsNovember 24, 2021
With Daniel Lippman
PROGRAMMING NOTE: We’ll be off for Thanksgiving this Thursday and Friday but back to our normal schedule on Monday, Nov. 29.
BOY SCOUTS WILL LOBBY ON BANKRUPTCY BILL: The Boy Scouts of America has hired former Alabama Democratic Rep. Bud Cramer and Jefferies Murray of 535 Group to lobby on bankruptcy reform legislation aimed at curtailing a settlement practice that would release troop sponsors, including tens of thousands of churches and civic groups; local councils; and the national Boy Scouts organization from liability for sexual abuse claims lodged against the organization.
— The House Judiciary Committee approved the Nondebtor Release Prohibition Act this month. The bill targets what Democrats describe as a loophole in bankruptcy code that “helped the Sackler family, the people and institutions that enabled Larry Nassar, and others like them escape accountability for wrongdoing through bankruptcy proceedings.”
— The bill would restrict the use of third-party, or nondebtor, releases in bankruptcy proceedings, unless express consent is given by the creditors. The practice, which has split federal courts, shields affiliates, officers or other stakeholders who may be accused of wrongdoing but who have not filed for bankruptcy protections themselves — in exchange for settlement payments and, in the Boy Scouts’ case, signing over some insurance rights. The tactic has been used in the bankruptcy settlements of several high profile cases in recent years, including those of opioid maker Purdue Pharma, USA Gymnastics and church dioceses.
— The bill would also place restrictions on bankruptcy courts’ ability to pause lawsuits against third parties while a repayment plan is negotiated, and allow courts to dismiss Chapter 11 bankruptcy reorganization cases if a debtor was formed during a divisional merger that took place in the last decade. Critics of the bill, which was approved on party lines, argue the legislation could disrupt bankruptcy proceedings in favor of lengthy litigation that may result in less of a recovery or no resolution at all, while empowering small numbers of holdout creditors.
— “The Boy Scouts of America (BSA) engaged 535 Group to help explain our proposed Plan of Reorganization to lawmakers and demonstrate how the current structure is the best path forward for Scouting and for survivors, with this Plan poised to establish the largest sexual abuse compensation fund in the history of the United States,” a spokesperson told PI, adding that the organization has “spent nearly two years working through a financial restructuring to come to a resolution that will equitably compensate survivors of past abuse and ensure that Scouting’s mission continues.” The Associated Press reported this fall that ballots to approve the Boy Scouts’ reorganization plan and proposed $1.6 billion trust fund are being sent to the more than 82,000 men who say they were molested as scouts.
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PANDEMIC PREPAREDNESS GROUP LOBBIES UP: Guarding Against Pandemics, an advocacy group pushing for more investment in preparing for the next pandemic, is ramping up its lobbying operation as it pushes to hike the amount of funding included in Democrats’ reconciliation bill or through other avenues.
— According to disclosures filed this week, Varun Krovi, a former House Democratic aide and former lobbyist at Invariant, registered as an in-house lobbyist for the group in September. The group hired a team of more than a dozen lobbyists at Ogilvy Government Relations a month later, according to another disclosure filing. The group, which is funded in-part by crypto billionaire and Biden donor Sam Bankman-Fried, previously hired Van Scoyoc Associates in August.
— Guarding Against Pandemics has fought for Democrats to provide $30 billion for pandemic preparedness in their reconciliation bill, a number initially sought by President Joe Biden this spring. He later decreased that figure to $15 billion, and the sum included in the version passed by the House last week was slashed even further, to $3 billion, according to figures from the Kaiser Family Foundation. Another $16.2 billion would go toward building out public health infrastructure.
— In response to earlier reports that pandemic preparedness funding might be gutted as Democrats sought to reduce the price tag of the bill, Guarding Against Pandemics called the suggestion “unthinkable.” The group has also applauded pandemic preparedness provisions in legislation introduced by Reps. Diana DeGette (D-Colo.) and Fred Upton (R-Mich.) last week, though that bill faces steep odds in a narrowly divided Congress.
DOING IT FOR THE ‘GRAM: “Adam Mosseri, the head of Instagram, has agreed for the first time to testify before Congress, as bipartisan anger mounts over harms to young people from the app,” The New York Times’ Ryan Mac and Cecilia Kang report. Mosseri “is expected to appear before a Senate panel during the week of Dec. 6 as part of a series of hearings on protecting children online, said Senator Richard Blumenthal, who will lead the hearing.”
— “Mr. Mosseri’s appearance follows hearings this year with Antigone Davis, the global head of safety for Meta, the parent company of Instagram and Facebook, and with Frances Haugen, a former employee turned whistle-blower. Ms. Haugen’s revelations about the social networking company, particularly those about Facebook and Instagram’s research into its effects on some teenagers and young girls, have spurred criticism, inquiries from politicians and investigations from regulators.”
— “Blumenthal said he would question Mr. Mosseri about how Instagram’s algorithms can send children into dangerous rabbit holes” and “would seek a commitment from Mr. Mosseri to make Instagram’s ranking and recommendation decisions transparent to the public and to experts who can study how the app amplifies harmful content.”
ANOTHER SETBACK FOR ISRAELI SPYWARE FIRM: “Apple sued the NSO Group, the Israeli surveillance company, in federal court on Tuesday, another setback for the beleaguered firm and the unregulated spyware industry,” The New York Times’ Nicole Perlroth reports. “The lawsuit is the second of its kind — Facebook sued NSO in 2019 for targeting its WhatsApp users — and another consequential move by a private company to curb invasive spyware by governments and the companies that provide their spy tools.”
— “Apple, for the first time, seeks to hold NSO accountable for what it says was the surveillance and targeting of Apple users. Apple also wants to permanently prevent NSO from using any Apple software, services or devices, a move that could render the company’s Pegasus spyware product worthless, given that its core business is to give government clients full access to a target’s iPhone or Android smartphone.”
— “Apple is also asking for unspecified damages for the time and cost to deal with what the company argues is NSO’s abuse of its products. Apple said it would donate the proceeds from those damages to organizations that exposed spyware.”
— Jenelle Krishnamoorthy has been promoted to be vice president for global public policy and international affairs at Merck. She most recently was the company's associate vice president for global policy for communications and population health.
GEORGIA VALUES ACTION (Super PAC)
PURPLE PAC (PAC)
Supernova PAC (Super PAC)
Texans Against Beto (PAC)
535 Group, LLC: Boy Scouts Of America
Ballard Spahr LLP: Grail, LLC
Cdb Projx LLC: Clemson University
Cornerstone Government Affairs, Inc.: The Pew Charitable Trusts
Guarding Against Pandemics, Inc.: Guarding Against Pandemics, Inc.
Washington & Madison, LLC: American Hellenic Institute
Big Fire Law & Policy Group, LLP: Ndn Collective
First Strategic: Sda Inc.
Maryland & District Of Columbia Credit Union Association: Maryland & District Of Columbia Credit Union Association