BSA bankruptcy judge puts 82,200 sexual abuse survivors on hold

A Delaware bankruptcy judge who approved most of the Boy Scouts of America’s reorganization plan, rejected a few provisions leaving the organization to make decisions that will influence the case’s impact on 82,200 sexual abuse survivors.

Judge Laurie Selber Silverstein issued her 281-page ruling several months after holding a trial to determine whether to confirm the plan. She approved most aspects of the settlement framework while overruling many objections to the deal.

While the ruling blocks the settlement from moving forward until unresolved issues are settled, the Boy Scouts organization called it a “significant milestone” in the case.

An attorney for Young Conaway Stargatt & Taylor, one of the law firms involved in the case, estimated that victims could receive payments ranging from $3,500 to $2.7 million when the case is concluded. At least 27 law firms represent clients who have filed abuse claims.

If the plan is not confirmed and the Boy Scouts of America goes into liquidation, individual survivors would have to litigate for years to recover compensation.

“We are committed to working with all constituents to make the necessary changes required by the ruling to drive this process forward and we remain optimistic about securing approval of a final Plan as soon as possible,” said a statement from BSA.

She invited the organization to request a status conference in the case but indicated favor for the reorganization plan that won overwhelming support from survivors of past abuse in Scouting, with more than 85% voting to approve it.

Silverstein overruled most of the objections to the plan, which establishes the largest sexual abuse compensation fund in the history of the United States—currently valued at $2.7 billion but expected to increase as additional settlement agreements are reached.

“We are committed to working with all constituents to make the necessary changes required by the ruling to drive this process forward and we remain optimistic about securing approval of a final plan as soon as possible,” said BSA.

The Boy Scouts sought bankruptcy protection more than two years ago, in the face of hundreds of lawsuits alleging child sexual abuse by Scout leaders and volunteers.

the ruling did not indicate when any of the 82,200 sexual abuse claimants in the bankruptcy might receive any compensation.

The plan calls for the Boy Scouts of America and its 250 local councils, along with settling insurance companies and chartered troop sponsoring organizations, to contribute some $2.6 billion in cash and property to a fund for abuse claimants.

In return, those entities would receive liability releases shielding them from future lawsuits over Scouting-related abuse.

The Coalition of Abused Scouts for Justice, which represents many victims in the bankruptcy case, said the decision would protect future Scouts from abuse.

“Throughout this case, what we’ve heard time and again from survivors is that it’s not only about the money, because no amount of money in the world will make up for being sexually abused as a child,” the coalition said in a press release.

Ricky Mason, an attorney representing local Boy Scouts councils in the case, said he was pleased that Silverstein’s decision recognized “the importance of both bringing closure to survivors and preserving the Scouting mission through the global settlement,” even if she did not outright approve the current restructuring plan.

The plan also allows abuse claimants to sue insurance companies and local troop sponsoring organizations that do not enter into their own settlements within one year.

When it filed for bankruptcy, the BSA faced about 275 filed lawsuits and was aware of roughly another 1,400 potential cases, but more than 82,200 abuse claims were filed in the bankruptcy.

Attorneys for BSA insurers argued early on that the sheer volume of claims was an indication of fraud and the result of aggressive client solicitation by attorneys and for-profit claims aggregators.

“We are enormously grateful to the survivor community whose bravery, patience, and support has been instrumental in the formation of this Plan,” said BSA National Chair Dan Ownby. “Our hope is that the confirmation of the BSA’s Plan will bring this financial restructuring process to an end, providing survivors with equitable compensation, and the closure they deserve while preserving the mission of Scouting for young people for years to come.”