The Boy Scouts of America (BSA) organization has reached an $850m agreement with attorneys representing about 60,000 victims of child sexual abuse in what could prove to be a pivotal moment in the group’s bankruptcy case.
The settlement would mark one of the largest sums in US history involving cases of sexual abuse.
Attorneys for the BSA filed court papers late on Thursday outlining a restructuring support agreement with attorneys representing abuse victims.
The agreement also includes attorneys representing local Boy Scouts councils and lawyers appointed to represent victims who might file future claims.
“After months of intensive negotiations, the debtors have reached resolution with every single official and major creditor constituency in these chapter 11 cases,” BSA attorneys wrote, with chapter 11 referring to bankruptcy protection, a legal facility allowing struggling companies to continue operating while roped off from creditors and plaintiffs, while they negotiate with a variety of financial institutions, unions or courts.
The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection in February 2020, moving to halt hundreds of lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.
But BSA attorneys have been unable to get attorneys for victims, the BSA’s local councils and sponsoring organizations, and insurers to agree on a global resolution that would compensate abuse victims while allowing the 111-year-old organization to continue operating.
The agreement signals the BSA’s acknowledgment that the gulf between attorneys representing abuse victims and those representing the BSA’s insurers is currently too broad to be resolved.
They may very well be left to resolve their differences in future court battles, a prospect that the BSA had sought to avoid.
In an earlier court filing on Thursday, attorneys for certain insurance companies accused the BSA of allowing attorneys for abuse victims to rewrite the BSA’s restructuring plan to include terms favorable to their clients.
“With only the fox guarding the henhouse, the outcome is utterly at odds with what BSA itself asserted was necessary for a confirmable plan and is permissible under the bankruptcy code,” the insurers wrote.
Attorneys for insurers appear to be particularly concerned that the BSA’s liability for abuse claims would be adjudicated under proposed trust distribution procedures in an effort to decide insurance coverage issues.
Meanwhile, in connection with the restructuring support agreement, attorneys for the Boy Scouts are asking for US bankruptcy judge Laurie Selber Silverstein to declare that they have no obligation to seek court approval of a previously announced settlement with the Hartford, one of the BSA’s insurers.
A hearing in the case is scheduled for 20 July.
• In the US, Rainn offers support on 800-656-4673. In the UK, Rape Crisis offers support for rape and sexual abuse on 0808 802 9999. In Australia, support is available at 1800Respect (1800 737 732). Other international helplines can be found at ibiblio.org/rcip/internl.html