Wall Street Journal [New York NY]
May 24, 2021
By Peg Brickley and Joseph De Avila
Chapter 11 odyssey has left some victims who stepped forward at the Boy Scouts’ request feeling angry and mistrustful of the process
When the Boy Scouts of America filed for bankruptcy last year and asked alleged victims of childhood sexual abuse to step forward, roughly 84,000 did, with many hoping the legal proceeding would help usher a financial settlement—and some closure to their ordeals.
But 15 months later, those who came forward are still waiting as the Boy Scouts’ odyssey through chapter 11 approaches the finish line without a clear resolution of their claims.
Boy Scout lawyer Jessica Lauria said in a court hearing last week that the only way to preserve the organization’s mission is to reorganize it rather than liquidating assets to pay sex abuse claims. Breaking up the Boy Scouts would harm 700,000 active Scouts, she said.
But to turn the page on a legacy of sexual abuse and the resulting legal exposure, the Boy Scouts need to reach consensus with most survivors, who have the right to vote on any settlement the organization puts forth.
Closed-door mediation sessions and more than $100 million spent on legal fees haven’t closed the gap between the ask and the offer. The Boy Scouts have made progress in recent days toward a potential agreement with a coalition of law firms that represents the bulk of the victims who have filed claims over childhood abuse, people familiar with the matter said.
But the Boy Scouts are farther apart from a separate official committee of survivors, other people said. A court hearing that was slated for Monday, where a judge was to decide whether to allow victims to vote on the Boy Scouts settlement, was delayed a week, so talks could continue.
A central dispute concerns the financial cost of decades of child sexual abuse that the victims say the Boy Scouts failed to prevent. The organization estimates the damages due to victims at between $2.4 billion to $7 billion. The official survivors’ committee has pegged the damages at more than $100 billion.
In recent weeks, the Boy Scouts said that “considerable progress has been made as we continue to work with survivors, insurers, and other parties in the case toward a global resolution that will equitably compensate survivors and ensure that Scouting’s mission continues.” On Friday, the Boy Scouts didn’t respond to a request to comment on the status of negotiations.
The organization has apologized to those it failed to protect from sexual predators and promised to provide fair compensation for survivors. The bankruptcy filing, made in February of last year, was supposed to ease a settlement, halting a race to lay claim to the organization’s assets and getting compensation to victims faster and more efficiently than they could hope for through litigation.
Claimants have clashed with the youth group over its trove of real estate, investments and other holdings, probing for ways to come up with compensation for lives upended by childhood trauma. The Boy Scouts have pushed back, insisting that hundreds of millions of dollars of assets need to stay within the organization and aren’t available to victims.
The organization claims to have put in place some of the strongest safety programs in the country. The Boy Scouts have said they can’t afford to drag out the process for much longer and need to nail down a settlement and emerge from bankruptcy by the end of the summer.
“We’re at the tipping point, your honor,” Ms. Lauria said last week in the U.S. Bankruptcy Court in Wilmington, Del., where victims have been vying to strip the organization of control over its own chapter 11 case.
If the victims’ request is granted, they could propose their preferred terms for ending the bankruptcy, the largest ever filed over sexual abuse. The most recent offer on the table from the Boy Scouts carries a value of roughly $1.2 billion, plus the rights to uncertain recoveries from insurance policies.
Victims’ representatives have spurned the proposal, labeling it a “death trap” designed to pressure them into accepting a subpar deal. The upfront compensation under that offer works out on average to about $14,000 per claim, less than what victims have received from the dozens of Catholic dioceses and religious orders bankrupted by claims of clergy abuse.
The process has left many victims doubtful that the Boy Scouts can fashion a workable plan—and angry after they broke decades of silence and stepped forward at the organization’s request.
“What happened to us is a scar and that is never going to go away,” said Doug Kennedy, 59, a professor at Virginia Wesleyan University in Virginia Beach who said he was sexually assaulted as a teenager while on a Boy Scouts camping trip in New York. “And if this does not have a financial resolution for victims, those scars are going to be open wounds for life.”
The organization encouraged survivors to file claims after it filed for bankruptcy in February 2020 but didn’t anticipate that so many men would step forward. A successful exit from bankruptcy would remove the threat of future litigation hanging over the Boy Scouts. It would also keep secret a trove of internal records of known and suspected sexual predators dating back nearly a century.
The current legal exposure also threatens the financial health of the roughly 250 local Boy Scouts councils spread across the country, which hold the bulk of the organization’s wealth but aren’t themselves in bankruptcy.
Doug Parker, who said he was sexually abused as a child in the Boy Scouts in New Jersey, said he is frustrated by the lack of information about abuse that has been disclosed related to the local councils. The bankruptcy process was supposed to help bring closure for people abused in the Boy Scouts, but the lack of progress so far has been insulting, he said.
“It seems like they really don’t care,” said Mr. Parker, 71 years old, who lives in East Windsor, N.J. “They just don’t care, and it’s very upsetting.”
Hundreds of victims have written to the judge, expressing their views and telling their stories. Many details of the abuse remain hidden underneath redactions put in place by the bankruptcy court before the documents were posted publicly.
“Are you kidding me?” asked John Humphrey, 59, a survivor and information technology consultant in Dallas who is chairman of the official bankruptcy committee representing victims. “It’s time people woke up and realized what was going on in those tents, in the car rides home, in the backyards.”
Chris Rodgers, who said he was abused as a child in New Jersey, said the organization’s efforts to shield its assets and those of the local councils gives the appearance it isn’t treating victims with proper respect.
“They need to really make good on getting these claims settled in a fashion that is honorable. And the way they are doing this is not honorable. Lives have been destroyed, mine in particular,” said Mr. Rodgers, 45, who lives in Shoreham, N.Y. “They are basically doing this dance, kind of trampling over those lives that have been kind of lost.”