The Boy Scouts of America has filed for bankruptcy protection in hopes of drafting a compensation plan for potentially bloated victims among hundreds of sexual abuse cases.
Filing Chapter 11 at the Wilmington Federal Bankruptcy Court in Delaware on Tuesday sets in motion what could be one of the biggest and most complex bankruptcies ever seen. Dozens of lawyers are seeking settlements on behalf of several thousand men who claim to have been harassed as a scout by scoutmasters or other leaders decades ago, but who are only now able to sue due to recent changes in statutory laws on the limitations of their States.
By going to bankruptcy court, scouts can put those lawsuits on hold for now. But eventually they could be forced to sell some of their vast properties, including camping and hiking trails, to raise funds for a compensation fund that could exceed a billion dollars.
“Scouting programs will continue throughout this process and for many years to come,” said Scout spokesman Evan Roberts. “Local councils are not filing for bankruptcy because they are legally separate and distinct organizations.” “
Boy Scouts are only the last major American institutions to face a heavy price for sexual abuse. Catholic dioceses across the country and schools like Penn State and Michigan State have paid hundreds of millions of dollars in recent years.
The finances of boy scouts have been severely tested in recent years due to the drop in membership settlements and sexual abuse.
The number of young people taking part in the scouting fell below 2 million, down from over 4 million in the peak years of the 70s. The organization tried to counter the decline by admitting girls, but its membership was very successful on January 1 when The Church of Jesus Christ of Latter-day Saints – a major sponsor of Boy Scout units for decades – cut ties and withdrew more than 400,000 scouts for their own programs.
The financial outlook worsened in 2019 after New York, Arizona, New Jersey and California passed laws that make it easier for long-term abuse victims to file complaints. Lawyer teams in the United States have signed hundreds of clients to report Boy Scouts.
Most of the emerging cases date back to the 60s, 70s and 80s; the organization claims that there were five known abuse victims in 2018.
Among the issues to be addressed in bankruptcy court: the fate of the Boy Scouts’ assets; the extent to which the organization’s insurance will help cover compensation; and if the Scouts’ resources are more than 260 local councils, they will be added to the fund.
“There are many very angry and resentful men out there who won’t let the Boy Scouts go without saying what all their assets are,” said attorney Paul Mones, who represents numerous clients suing the BSA. “They don’t want any stone unturned.”