USA Today [McLean VA]
September 8, 2022
By Cara Kelly
A federal judge gave final approval to the Boy Scouts of America’s plan to exit bankruptcy Thursday, marking an end to the largest sexual abuse case against a single organization in American history.
Judge Laurie Selber Silverstein confirmed the plan a little more than a month after signaling she would do so in a 300-plus page opinion that found a trust at the heart of Scouts’ proposal would be adequate to compensate victims of abuse.
Silverstein had rejected one portion of the plan in her July opinion: A $250 million settlement with the Church of Jesus Christ of Latter Day Saints, which she said would protect the church from claims of abuse that weren’t directly tied to Scouting. Scouts subsequently scrapped the settlement, leaving victims with claims against the church free to pursue them outside the bankruptcy.
Central to the bankruptcy plan is a $2.46 billion trust fund for survivors — down from $2.7 billion without the contribution from the Mormon church. In return, the Boy Scouts of America and local councils, troops’ sponsors and insurance companies that contributed to the fund can no longer be sued for past abuse. Abuse victims will be able to file separate claims against the Mormon church and insurance companies who did not settle.
Oversight of the trust, and its distribution procedures, will be handed over to retired bankruptcy judge Barbara Houser. From here, that process may take months or years, as could potential appeals from those who objected to the plan.
However, for many Scouts, survivors and their attorneys, the ruling is a relief after years of legal battles.
“It’s an emotional day,” said Anne Andrews, an attorney with the Coalition for Abused Scouts for Justice, which represents abuse claimants in the case. “It was long time coming but it was worth waiting for.”https://d00e4fd3e1369f3a1503217840ca35a9.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
In a statement, Boy Scouts said it was pleased with the confirmation but, “because certain parties have communicated their intent to appeal the confirmation order, we will next begin a District Court appeal process in order to emerge from Chapter 11, which will allow survivors to be equitably compensated and preserve the mission of Scouting.”
What’s next for abuse survivors?
The hard work of vetting individual claims has yet to begin, and will likely take months – or years – to complete.
Survivors have three options:
- Accept an expedited $3,500 that requires minimal documentation and vetting;
- See where they fall on a matrix with compensation ranges based on the type of abuse, which may require additional documentation;
- Pursue an independent review process intended to replicate the award they might have received in a civil court case.
Claims holders had to chose the expedited option when submitted their vote to for or against the plan in December – and more than 7,000 of them did so. They will have to do little else beyond making sure their signature was on their original claim form and signing a release saying they won’t sue the parties who contributed to the trust.
Claims using the matrix option will be reviewed by Houser and her team. They will look at whether a claimant has named or described their abuser, provided information clearly connecting the abuse to Scouting and identified a date or their approximate age at the time of the abuse – and where it happened. Claims missing any of that information will be dismissed.
A matrix is essentially a formula that will help determine who gets how much, with six tiers starting at sexual abuse that did not involve touching – assigned a value of between $3,500 and $8,500 – to rape, which could reach $2.7 million.
The scale of the abuse will also be considered: payouts may be higher if the abuse was particularly severe or frequent, if the abuser is accused of abusing others, and if the claimant can show negative impact, such as a need for mental health treatment.
Jason Amala, who, with his colleagues, represents more than 1,000 sex abuse victims in the case, said those factors can significantly increase or decrease potential payouts.
The third option for claimants to pursue, the independent review, was added in the latest round of negotiations. It is designed for those who think they would have received a substantial award from a jury had the bankruptcy filing not cut off that avenue. It requires survivors to pay $20,000 upfront for fees and prove that Boy Scouts was negligent in their abuse, providing the level of evidence typically seen at trials, including an interview with the survivor and other documentation.
Further legal action
Abuse survivors with claims that involve entities that didn’t contribute to the settlement trust may have a fourth option: civil lawsuits.
“The plan doesn’t settle and release all claims against all entities,” Amala said.
Chief among them are claims against the Mormon church.
For more than 100 years, the church was one of Boy Scouts’ largest partners until it withdrew its members at the end of 2019. More than 2,300 claimants named the church as the charter organization during their abuse — the highest number for any charter — though Scouts said it could be up to 10,000.
Because the settlement was scrapped, people who were abused in Scout troops sponsored by the church, or at church events that overlapped with scouting events, can still sue the church.
That logic also applies to other entities that didn’t settle, including insurers who hold Boy Scouts policies and other charter organizations. Only the Methodist Church reached a settlement approved in the plan — thousands of other charter organizations may still have liability.
“If you have a claim against a charter organization before 1976, and that charter didn’t have insurance from one of settling insurance companies, you can sue in state court,” Amala said.
Some claimants will be restricted from doing so based on where they live, and if their state has statutes of limitations for suing. Some, including California, have opened windows allowing such suits to be filed for a period of time. California’s so-called look-back window closes at the end of this year.
A record-setting case
The ruling comes two and a half years after Boy Scouts filed for bankruptcy protection. At the time, the scouting organization said it faced 275 abuse lawsuits and up to 1,400 other claims.
Months of proceedings proved that a gross underestimate: A historic 82,000-plus abuse claims were filed, making it the largest-ever child sex abuse case involving a single national organization.
The case has been record-setting in many other respects. More than 9,500 motions, objections and other documents have been filed. At least 11,000 advertisements ran before the deadline to file claims.
The settlement trust for survivors has also been hailed as one of the largest in such cases. Nonetheless, the average payout for each survivor – about $33,000 – may be among the lowest.
For instance, USA Gymnastics’ reorganization plan was approved in December and included a $380 million settlement. Before expenses for vetting and distribution, that is an average $760,000 for each of the 500-plus survivors.
The total amount spent on legal and professional fees will also be one for the books. Boy Scouts had spent $266 million by the time of the confirmation hearing in March – more than the $219 million it will pay to survivors. Scouts paid an average of $15 million on professional fees per month, and $3 million while awaiting the judge’s decision, meaning the total could top $300 million.
All told, the lawyers, financial advisors and consultants working the case may share $1 billion, according to a USA TODAY analysis.
How did we get here?
After nearly two years of often contentious debates, a critical agreement between Scouts and survivors was reached in February.
The Tort Claimants Committee, the official body representing survivors in the bankruptcy, said revisions to the plan resulted in the group’s support, including enhanced child protection procedures.
“For the first time in the history of the BSA, survivors have a seat at the table to make sure that child safety is BSA’s first priority,” said Doug Kennedy, a co-chair of the Tort Claimants Committee and a Scout sexual abuse survivor.
The Coalition for Abused Scouts for Justice, which also represents survivors but broke off from the official committee, also praised the agreement as the result of weeks of positive negotiations.
Enhanced safety protections will require Scouts to:
- Hire a Youth Protection Executive within six months.
- Form a Youth Protection Committee with abuse survivor members.
- Hire an independent third party to review its youth protection program.
- Conduct a comprehensive review of its Youth Protection training.