Bankrupt Boy Scouts Face Claims From Over 10,000 Abuse Victims

(Bloomberg) -- The Boy Scouts of America, which filed for bankruptcy in February, is expected to face at least 10,000 sex abuse claims in its bankruptcy, a lawyer representing victims said Thursday.

James Stang of the law firm Pachulski Stang Ziehl & Jones LLP, who represents the tort claimants’ committee, provided the latest number of abuse claims during a court hearing.

The committee previously said it expected over 7,000 cases to be filed by the Nov. 16 deadline, according to a June court filing.

Bankruptcy court Judge Laurie Selber Silverstein approved a motion to extend the Scout’s exclusive ability to file a Chapter 11 plan at the hearing, and put off until early next week her decision on the fitness of a contested mediator.

Asset Moves

During the hearing, lawyers argued over asset transfers allegedly made by local councils of the Boy Scouts. Those actions could potentially move assets out of reach of victims seeking restitution. Stang said such moves were “intentional fraudulent transfers.”

Lawyers for the Boy Scouts disputed that claim.

“Seventy percent of local councils have had to cancel summer camps this year, that is their principal source of income,” said Jessica C. K. Boelter of law firm Sidley Austin LLP.

The Boy Scouts are one of several non-profit groups to go bankrupt in recent years after being accused of turning a blind eye to the widespread sexual abuse of children in their care. USA Gymnastics and more than 20 dioceses of the Catholic Church have sought court protection after facing similar claims.

Boy Scouts of America’s Chief Executive Officer Roger Mosby said in a statement earlier this year the group “cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting.” He also said he believes the bankruptcy process will provide equitable compensation to all victims while maintaining the organization’s mission.

The case is Boy Scouts of America, 20-10343, U.S. Bankruptcy Court for the District of Delaware.

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