Two years after filing for Chapter 11 protection amid a flood of child sex abuse lawsuits, the Boy Scouts of America (BSA) has reached a tentative settlement with a committee appointed by the U.S. bankruptcy trustee to represent more than 80,000 victims who were molested as children by Scout leaders and others.
The compensation fund would pay out more than $2.6 billion, making it the largest total sexual abuse settlement in U.S. history.
Accounts from men and boys who leveled accusations of rape, molestation and other sexual abuse indicated the Boy Scouts’ pedophile problem was far more widespread than the organization has previously acknowledged.
The official abuse claimants committee, known as the tort claimants committee or TCC, was appointed by the U.S. bankruptcy trustee to act on behalf of the interests of all sexual abuse survivors.
It has long maintained that the BSA’s plan to compensate abuse victims was “grossly unfair,” representing only a fraction of potential liabilities of insurers and local Boy Scout councils, and a fraction of what they can pay.
When hit with mounting claims of sexual abuse, the Boy Scouts of America filed for bankruptcy and attempted unfair tactics to prevent moving their assets into a victims’ compensation fund as a way to avoid payment for legitimate damages.
The judge presiding over the BSA bankruptcy delayed the start of a trial to determine whether the organization should be allowed to enter an agreement with the panel representing more than 80,000 victims.
During a three-hour hearing Friday, Judge Laura Selber Silverstein pushed back the start of the confirmation hearing from Feb. 22 to March 9.
The Boy Scouts had asked for only a one week delay, while plan opponents said they would need several weeks to analyze and respond to several new provisions in the plan.
A Plan of Reorganization filed by the Boy Scouts of America on March 1, 2021 would “fall woefully short of fairly compensating victims nationwide,” according to lawyers working on the case, who added: “Please have patience and do not take to heart the numbers you are hearing. This is the beginning of a long battle and we have your back.”
Following weeks of mediation, the plan has been revised to address the TCC’s main concerns and now presents what attorneys say is the best recovery alternative for the largest number of survivors.
The revised plan resolved concerns regarding such issues as prospective youth protection, independently governing the settlement trust, and fund distribution procedures.
BSA will implement material changes to its youth protection procedures to help ensure no further abuse and to provide better transparency into the oversight of the children in BSA’s scouting programs.
Detective Michael Johnson, the former Youth Protection Director of the Boy Scouts of America, urged Congress to open an investigation and claimed dangers to child safety still exist within Scouting BSA.
Among fifteen material changes to the Youth Protection Procedures are: (a) hiring a Youth Protection Executive with extensive experience in preventing childhood abuse; (b) formation of a Youth Protection Committee composed of survivors; (c) an update of existing policies on overnight stays, criminal background checks, consolidate practices and procedures; (d) procedures to disclose of information in Volunteer Screening Database; and (e) prospective reporting regarding abuse.
The current plan includes approximately $2.7 billion although more than 15 insurance companies and many chartered organizations have not settled.
The revised structure of the Settlement Trust creates a path to maximize recoveries from non-settling insurance companies and charter organizations and increase compensation to victims.
The Settlement Trust will be administered by individuals selected by an advisory board of seven members. Three members selected by the TCC, three members selected by the coalition, and one member selected by an unaffiliated group of objecting survivors.
The advisory board will be well balanced to help ensure that survivors have a meaningful voice in the administration of the Settlement Trust.
The Trust Distribution Procedures (TDP) used to value and pay your claim have been modified. The modified TDP will provide for an alternative review process that is designed to allow survivors to seek a valuation of the claim that exceeds the maximum values in the TDP claims matrix.
Survivors also will be able to opt-out of the TDP to pursue claims against certain parties in state court.
The overbroad releases proposed under the prior plan have been narrowed so that a survivor can sue a chartered organization that has not contributed to the settlement trust or is not covered by an insurance policy issued by a settled insurance carrier.
The opportunity to sue such a chartered organization may benefit individual survivors and may enhance the trust’s ability to settle with chartered organizations.
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