[Cynnabar] [Announcements] Lawsuit Settlement

[Johnna Holloway]

This came out over the SCA Announcements email list tonight.

I thought it was worth reposting ASAP.

Johnnae llyn Lewis



Subject: 	[Announcements] Lawsuit Settlement
	Date: 	February 4, 2012 7:05:53 PM EST
	To: 	announcements at lists.sca.org
	Reply-To: 	comments at sca.org



The Society for Creative Anachronism, Inc. (SCA) has been operating  
under the burden of a massive and difficult legal battle that has  
critically drained resources and caused significant ongoing  
difficulties for the organization. In October 2011, the board of the  
SCA and its legal counsel were finally able to resolve this issue, but  
not without significant financial costs.

The Board of Directors and Officers of the SCA continue to make  
significant efforts to be as transparent as possible, but since the  
case related to the heinous sexual abuse of several minors, we  
naturally have been and continue to be unable to discuss many aspects  
of the case.

Background:

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 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. The Plaintiffs in the lawsuit  
demanded Seven Million Dollars ($7,000,000.00) in damages from the  
SCA. In accordance with Corpora and the Bylaws, the SCA agreed to  
indemnify the three individual local officers who were named in the  
lawsuit.

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.

  In October of 2011, the victims agreed to settle for $1,300,000.00.  
This settlement was presented for approval to both the SCA’s  
insurers.  The acceptance of this offer provides the SCA, Inc .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 $1M.

The SCA is continuing its lawsuit against the insurance carrier that  
refused to contribute to the settlement and is seeking repayment of  
the full $850,000.

Current Status:

To meet the terms of the settlement, and cease any further litigation  
against the SCA, its Kingdoms, and their officers with respect to Mr.  
Schragger’s abuse, the SCA is now forced to pay $850,000 for the  
settlement within a short timeframe. The SCA is continuing its suit  
against the non-paying insurance carrier, which has a trial date set  
of May, 2012.

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 the United  
States, 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.

The SCA's financial advisors have conducted extensive financial  
evaluations, and have determined that our mutual obligations to settle  
these liabilities will require 18% of each of those applicable  
accounts be contributed to the settlement.  This 18% contribution by  
the account holders listed above will finally resolve the current  
financial issues and mutual liabilities we are all facing.  By sharing  
the burden of our obligations equally, we can avoid any significant or  
unfair burdens to any one of our individual groups while protecting  
the integrity of the SCA as a whole, our shared Society, and our  
mutual “dream.”

Should the ongoing lawsuit against the insurance carrier prove  
successful, the funds that were provided by account holders described  
above, would naturally be returned to each on a pro rata basis of the  
recovered amount, once legal fees are settled.  Though there are no  
guarantees that this will happen or when it will happen, the Board is  
committed to pursue recovery of those contributions.

The relevant Kingdom officials will be contacted shortly to discuss  
the contribution formula and the amount each account holder (as stated  
above) will have to contribute to settle our mutual legal obligations.

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. In  
addition, we have held a series of conference calls with the reigning  
monarchs, seneschals and exchequers of all Kingdoms to more fully  
explain the issue and address their concerns, all of whom are also  
available to address questions.

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.

For more information go to http://sca.org/BOD/announcements/settlement.html 
  .

Yours in Service,

The Board of Directors
Leslie Vaughn, Chairman | Baronessa Isabeau della Farfalla (OP)
Mark Faulcon, Vice Chairman | Duke Martin Lochner (KSCA, OP)
John Fulton, Director | Duke John the Bearkiller (KSCA, OP)
Denise Hundley, Director | Countess Denise Duvalier (OP)
Tim Jennings, Director | Garraed Galbraith (OL)
Lisa May, Director | Countess Margaret ni Conner (OP)
Kim McAuley, Director | Viscountess Kaellyn mac Dermott (OP)
Max Nelson, Director-Elect | Baron Maximilian Von Halstern

The Senior Corporate Officers
Thomas W. Hughes, President | Baron Master Sean o'Shaughnessy
Kimberly Harvey, Vice-President for Operations (Society Seneschal) |  
Countess Kenna Harve (OP)
Renee Signorotti, Vice-President for Corporate Operations
Mazelle Attiya, Treasurer | Maitresse Alysia Gabrielle de Fougeres  
(OL, OP)
Dori Andrepont, Publications Manager | Baroness Doria Tecla (OP)


Comments are strongly encouraged and can be sent to:
SCA Inc.
Box 360789
Milpitas,  CA 95036

You may also email comments at lists.sca.org.

This announcement is an official informational release by the Society  
for Creative Anachronism , Inc.  Permission is granted to reproduce  
this announcement in its entirety in newsletters, websites and  
electronic mailing lists.

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