Finance debt

Boy Scouts Propose Sexual Abuse Settlement, Aimed To End Bankruptcy

The Boy Scouts of America donate cash, artwork and other assets to victims of sexual abuse as part of a bankruptcy plan filed Monday, an opening bet of the youth group to overcome child protection failures that have threatened its position in American society.

Sexual abuse by Scout volunteers has put the survival of the organization in jeopardy unless it can secure support for its Chapter 11 exit proposal, which offers a reward to victims of abuse for the damage it inflicts. ‘they suffered as children. The Boy Scouts apologized and said they wanted to make peace with the 85,000 people who came forward after the organization filed for bankruptcy to claim they had been sexually abused.

For the Boy Scouts to succeed, a judge in the U.S. bankruptcy court in Wilmington, Del., Will need to rule that the settlement offer the institution outlined on Monday is fair. Victims will have the opportunity to vote, as will other stakeholders in this 111-year-old organization.


The Chapter 11 plan would create a settlement trust to assess abuse claims and administer payments, building on the assets contributed by the Boy Scouts. The organization offers to contribute towards a collection of paintings by Norman Rockwell, certain oil and gas interests and the organization’s excess cash flow above a minimum of $ 75 million.

Insurance companies that have written policies covering the Boy Scouts have big financial interests at stake. These policies, on which victims rely for a large part of the group compensation, would also be ceded to the trust.

The Boy Scouts went bankrupt more than a year ago as they faced around 275 sexual abuse lawsuits and the potential for many more as states like California and New York suspended lawsuits. limitation periods on such claims.

They were following a strategy started decades ago by companies facing crushing liabilities over asbestos, a carcinogenic material that was once widely used. Bankruptcy has offered a avenue of preservation for some companies overwhelmed by product liability cases in the tens of thousands.


In recent years, bankruptcy has offered a way to resolve an increasing array of faults or alleged negligence that have sparked litigation. Catholic dioceses and religious orders, the governing body of American gymnastics, and Harvey Weinstein’s former film studio has filed for bankruptcy to respond to allegations of sexual abuse.

When the Boy Scouts filed for bankruptcy, they expected about 12,000 sexual abuse complaints to be filed. Instead, around 85,000 claims have emerged, making it the largest Chapter 11 filed on sexual abuse, eclipsing the combined total of claims in more than two dozen bankruptcies filed by Catholic dioceses and religious orders since 2004. .


Sexual predators began to infiltrate the ranks of the Scout volunteers almost as soon as the organization was formed, as can be seen from the Scout’s internal files of reports of abuse dating back decades. The Boy Scouts were forced to disclose thousands of files in an abuse case in Oregon in 2010, offering a clue to the scale of the scandal.

The bankruptcy aims to restore the Boy Scout brand, compensate victims, protect critical assets and safeguard most of the billions of dollars in wealth held by the organization’s local councils, which are not themselves in bankruptcy.

Local councils are being asked to contribute $ 300 million towards the settlement, in return for the same protection against legal liability for sexual abuse that the national organization is seeking. Local councils have not agreed to support the framework of the agreement and remain in private mediation with the victims’ lawyers.


Insurers also failed to sign and fought, filing a pre-bankruptcy lawsuit to challenge the Boy Scouts’ right to operate policies and cast doubt on the veracity of thousands of claims filed after bankruptcy for compensation.

Like the Boy Scouts, insurers owned by Chubb Ltd. and Hartford Financial Services Group Inc. follow an established guide to bankruptcies of companies that manufactured asbestos products. Insurers have argued that the prospect of paying a large bankruptcy trust has resulted in fraudulent claims, fueled by greedy lawyers whose clients should be faced with questions to determine the degree of potential fraud lurking in the 85,000. complaints.

The Boy Scouts have said they believe the victims and want to repair the damage. The largest abuse victims committee said insurers were only looking to intimidate and re-traumatize victims for a better deal.

The Chapter 11 plan calls for the protection of the Boy Scouts’ four flagship high adventure camps – the Philmont Scout Ranch in New Mexico, the Northern Tier in Minnesota and Canada, the Summit Bechtel Reserve in West Virginia, and the Sea Base in Florida.