Boy Scouts to exit bankruptcy after $2.46bn sex abuse settlement approved

The Guardian [London, England]

September 8, 2022

By Reuters

Judge will allow the youth organization to exit Chapter 11 and settle decades of claims by more than 80,000 men

The Boy Scouts of America secured approval of a $2.46bn reorganization plan from a bankruptcy judge on Thursday that will allow the youth organization to exit Chapter 11 and settle decades of claims by more than 80,000 men who say they were abused as children by troop leaders.

US bankruptcy judge Laurie Selber Silverstein in Wilmington, Delaware, signed off on the restructuring proposal after the Boy Scouts made changes to address her previous ruling that had rejected portions of the settlement.

The biggest change in the amended plan was the removal of a $250m settlement payment from the Church of Jesus Christ of Latter-day Saints, which Silverstein refused to approve.

Silverstein said that part of that settlement proposal went too far in attempting to protect the Mormon church from abuse claims that were only loosely connected to scouting activities.

The Irving, Texas-based organization, has said the reorganization will allow it to continue its scouting mission free from the threat of costly litigation.

“Today’s order means abuse survivors will get the compensation they deserve and millions of youth will benefit from scouting for years to come,” said Richard Mason, an attorney representing local Boy Scouts councils that contributed to the settlement.

The Boy Scouts filed for bankruptcy in February 2020 after being hit by a flood of sexual abuse lawsuits as several US states passed laws allowing accusers to sue over allegations dating back decades.

Those claimants became creditors of the organization, who had to sign off on any plans to restructure and exit bankruptcy.

The Boy Scouts lined up support for the settlement plan from 86% of claimants who voted on it and from its two largest insurers.

Some abuse victims and insurers continued to oppose the settlement, and a group of insurers has said they are likely to appeal.

The money individual abuse survivors stand to gain from the bankruptcy plan ranges from $3,500 to $2.7m, depending on the severity of the alleged abuse, where and when it occurred, and other factors.

The money for the settlement comes from the Boy Scouts, local councils, insurers and organizations that have chartered scouting units and activities, including churches.