Lawyers in Boy Scout Bankruptcy Case to Go after Local Councils" Properties
By Brady McCombs and Randall Chase
February 19, 2020
SALT LAKE CITY — Like millions of other Americans the 1950s and '60s, Duane Ruth-Heffelbower spent his formative years learning to tie knots, build campfires and pitch tents with the Boy Scouts, whose wholesome reputation was burnished by Norman Rockwell's paintings of fresh-faced Scouts, brave, courteous and cheerful.
Though he's no longer involved in Scouting, the 70-year-old Mennonite minister from Fresno, California, has followed the slow deterioration of the national Boy Scouts of America from afar and cringes to think what this week's bankruptcy filing over a blizzard of sex-abuse lawsuits might mean for an organization already grappling with a decline in membership.
"It's really sad. I'm afraid that people are going to be more skeptical than they were once about the organization and will be more inclined to look for other alternatives to Scouting," said Ruth-Heffelbower, who grew up in Kansas. "These days there are so many things pulling at kids."
With its finances and its reputation for moral rectitude damaged by scandal, the Scouts resorted to Chapter 11 bankruptcy Tuesday in hopes of pulling through the crisis by setting up a victims' compensation fund for thousands of men who were molested as boys by Scout leaders over the decades.
The fund could top $1 billion, but to raise the money, the national organization could be forced to sell some of its real estate holdings, which include its headquarters in Irving, Texas, and a huge campground in New Mexico.
The bankruptcy case began Wednesday with a court hearing in Wilmington, Delaware, where attorneys for victims made clear they will also go after campsites and other properties owned by the Boy Scouts' 261 local councils, and will also demand access to internal files containing abusers' names.
"Here is where we get the story, the dark history of the Boy Scouts. Will those be in the database?" asked plaintiffs' attorney James Stang, a veteran of several Roman Catholic diocese bankruptcies.
While some of the files on abusers have been released as the result of previous litigation, victims' attorney Michael Finnegan said thousands of names have still not been disclosed.
"Those names should be made public" so that communities are informed and children made safe, Finnegan said.
The local councils, which run day-to-day operations for local troops, were not included in the bankruptcy filing and are considered by the Boy Scouts of America to be legally separate entities.
Paul Mones, a Los Angeles attorney representing several alleged victims, predicted a "huge fight" over the locally held assets, adding that their value easily exceeds $100 million.
"That independence is on paper only," Mones said of the local councils, adding that the Boy Scouts of America is a "vertically integrated corporation" that exercises considerable influence over the local councils.
U.S. Bankruptcy Judge Laurie Selber Silverstein did not immediately rule on access to the files or how the property of the local councils will be treated.
Another battle is taking shape over what deadline the court will set for victims to file claims. Victims' attorneys chafed at the notion of an 80-day deadline, saying men who have suffered need more time.
Stang said the victims have experienced "conscience-shaking" trauma and would be forced to revisit painful memories from childhood. "These are not 60-year-old men filling out their claim forms," he said. "These are 8-year-old children filling out the claim forms."
Boy Scouts officials insist that nothing will change for young Scouts and their families. The organization provided a script for parents trying to explain to their children what's happening.
The bottom line: "There's nothing to be worried about. A Scout is always prepared, and the BSA is well-prepared," the organization said.
George Kain III, a longtime Scoutmaster in York, Pennsylvania, said he doesn't think bankruptcy will have a huge effect on local Scouting organizations. Kain, a retired lawyer who has been with the Scouts for 60 years, said plaintiffs' lawyers would have to show a connection between the alleged abuse and a local council's assets.
"There may well be situations where that's the case, but at the moment we're not there yet," Kain said. "I think that Scouting as the rank-and-file Scouts know it will continue."
For a variety of reasons, the number of youths taking part in scouting has dropped below 2 million, down from a peak of more than 4 million during the 1970s.
Gal Witmer of York, Pennsylvania, who has two children in Scouting — her 12-year-old son and 5-year-old daughter — said she is optimistic that the organization will survive bankruptcy and applauded it for "taking accountability."
Even with the Scouts recently raising the annual membership fee by more than 80% to $66, Witmer said Scouting's costs are quite reasonable compared with those of sports and other activities. Witmer, who was a den leader for her son and is now doing the same for her daughter, said leaders are vetted and trained thoroughly in abuse prevention.
"The training is excellent. To me, it feels very safe. If anything were to happen, they are so on top of it," Witmer said. "It's drilled into everyone, never be alone with a child."
John Milton Peterson III, a researcher and self-defense instructor who credits his adult success to the lessons he learned as a Boy Scout in Kentucky decades ago, said it upsets him that attorneys are targeting the organization rather than the "perverted" abusers.
"It's like sinking a battleship just to fix a broken part," Peterson said. "We can all see that really people are just out to destroy it. ... This is a benevolent organization that helped me a lot. It's a sad thing to see agenda-driven and greedy people twisting this."