Boy Scouts reach $850 million settlement with sex abuse victims

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The Boy Scouts of America agreed to a milestone $850 million settlement as part of a restructuring of its bankruptcy case that lawyers representing some 60,000 sex-abuse victims say will provide “meaningful compensation.”

Under the deal with lawyers of multiple victims groups, the BSA would sign over insurance rights to a trust that would handle claims and pay victims. The Boy Scouts of America would pay $250 million, and the organization’s local councils, or franchises, would pay at least $600 million. Victims would be able to still go after insurers and former insurers for payments.

The settlement will allow BSA to escape bankruptcy “while providing meaningful compensation to the victims, and holding the Boy Scouts’ insurers to the terms of the insurance policies purchased by the Boy Scouts and their affiliates over many decades,” lawyers representing all victim groups said in a joint statement.

Court papers filed in Delaware Bankruptcy Court Thursday showed the deal included the official Tort Claimants Committee and another group called the Coalition of Abused Scouts for Justice. Lawyers representing local Scout councils and attorneys tasked with representing future plaintiffs were also part of the agreement.

Thursday’s agreement signals that the BSA acknowledges that the gap between its insurers and victim’s lawyers is too wide to be resolved, after failing to find a global resolution that would pay victims and allow the national organization to continue.

“After months of intensive negotiations, the debtors have reached resolution with every single official and major creditor constituency in these Chapter 11 cases,” BSA attorneys wrote.

Some insurance companies involved accused the BSA of letting abuse victim representatives restructure the agreement, in a court filing earlier Thursday.

“With only the fox guarding the henhouse, the outcome is utterly at odds with what BSA itself asserted was necessary for a confirmable plan and is permissible under the bankruptcy code,” the insurers wrote.

Boy Scout lawyers requested that a bankruptcy judge rule that the organization does not have to seek court approval for the Hartford Settlement, a prior deal with insurers that released it from further obligation and capped payments at a value that victims said was undervalued.

The BSA has said that all together between $2.4 billion and $7.1 billion could be available for approximately 82,500 victims. TCC lawyers estimated that number at $103 billion.

The BSA sought bankruptcy protection last year as sex-abuse payouts and declining membership decimated its funds. In the process, hundreds of lawsuit payouts were halted in favor of a large compensation fund.

“All plaintiff representatives, who represent the vast majority of the holders of direct abuse claims, have indicated that any plan containing the Hartford Settlement would be categorically rejected,” the BSA court filing read. “Without their support, to be forced to pursue a plan that incorporates the Hartford settlement appears futile.”

In a statement Thursday, Kenneth Rothweiler, a lawyer representing 16,000 survivors, said he is “pleased that both the BSA and their local councils have stepped up to be the first to compensate the survivors.”

“We will now negotiate with the insurers and sponsoring and chartering organizations who have billions of dollars in legal exposure, of which a substantial portion is necessary to fairly compensate the survivors.”

The majority of the cases date back decades, before the BSA instituted a policy of having two adults supervise scouts in the late 80s.

In a 2019 court filing, one plaintiff said he was preyed upon in the 70s by an assistant scoutmaster who “actively groomed young boys under his charge for later sexual molestation.”

The accuser said when he was 12 or 13 he went through “hundreds of instances of fondling, hundreds of incidents of oral sexual assault and repeated attempts of anal penetration” at a Boy Scout retreat and at his accuser’s home.

A hearing on Thursday’s settlement is scheduled for July 20.

With AP wires

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