Boy Scouts Reach $850 Million Settlement With Abuse Victims

The Boy Scouts of America reached a settlement with a major group of sex-abuse survivors, a defining moment in the organization’s bankruptcy case.

The Boy Scouts have offered $850 million in cash and other assets to 60,000 abuse victims, including $59 million worth of art, according to court documents. The money will be paid to a trust set up to compensate victims.

The settlement leaves open the possibility that victims will fight for more from the Boy Scouts’ insurance companies, including Hartford Accident and Indemnity Company. Under the deal victim representatives have the option to oppose any reorganization plan that includes a $650 million settlement with Hartford.

The deal is “a significant step in shifting the focus of the Boy Scouts’ restructuring efforts to provide victims a stronger voice in the process and for the first time in these cases, a path to equitable compensation for the victims,” a representative for the survivors said in a statement.

The agreement, outlined Thursday in the latest version of the organization’s Chapter 11 plan, could help put an end to a nearly 18-month bankruptcy case that has cost the embattled nonprofit more than $100 million.

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

The organization, based in Irving, Texas, sought bankruptcy protection in February 2020, halting hundreds of lawsuits and creating a compensation fund for men who were molested in their youth decades ago by scoutmasters or other Boy Scout leaders.

In April, the Boy Scouts settled with insurance companies, who agreed to contribute $650 million to the victims’ trust. The victim groups in the current deal oppose that insurance settlement. The victims want the court to rule that the Boy Scouts are not bound by the insurance agreement, which has not yet been approved by a judge.

The Boy Scouts’ reorganization plan is similar to those set up by various Catholic churches and companies that made cancer-causing asbestos products. Under U.S. bankruptcy law, a judge can block lawsuits by channeling claims to an adequately funded trust, which is typically controlled by victims and their lawyers. Insurance companies play a key role in funding the trust and setting up rules to decide who gets paid.

The plan must pass a creditor vote and win approval from the U.S. Bankruptcy Court in Wilmington, Delaware, to take affect. A hearing is scheduled for July 20 with objections from parties due July 13, court papers show.

The case is In re Boy Scouts of America, Bankr. D. Del., No. 20-10343, amended plan filed 6/18/21.

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