DOVER (DE)
CNBC [Englewood Cliffs NJ]
February 10, 2022
KEY POINTS
- The Boy Scouts of America won pivotal support from a committee representing sexual abuse victims for a $2.7 billion settlement of their claims against the youth organization as it seeks to emerge from bankruptcy, according to a court filing.
- Ahead of a Feb. 22 hearing before a U.S. bankruptcy judge, the official committee representing victims in Boy Scouts’ Chapter 11 case has agreed to drop its long-standing objections to the settlement, the filing showed.
- More than 82,000 abuse claims have been filed against the Boy Scouts, which has called the deal the largest sexual abuse settlement in history.
The Boy Scouts of America won pivotal support from a committee representing sexual abuse victims for a $2.7 billion settlement of their claims against the youth organization as it seeks to emerge from bankruptcy, according to a court filing.
Ahead of a Feb. 22 hearing before a U.S. bankruptcy judge, the official committee representing victims in Boy Scouts’ Chapter 11 case has agreed to drop its long-standing objections to the settlement, the filing showed. The Boy Scouts, founded in 1910, previously has apologized for the abuse and committed itself to equitably compensate people who were abused as children.
More than 82,000 abuse claims have been filed against the Boy Scouts, which has called the deal the largest sexual abuse settlement in history.
The Irving, Texas-headquartered nonprofit organization, which had earlier secured separate backing from tens of thousands of abuse victims, will still need to get the approval of U.S. Bankruptcy Judge Laurie Selber Silverstein to sign off on the settlement.
In a vote tally announced in January, 73.57% of claimants supported the settlement plan, short of the 75% threshold the organization had been seeking. BSA has been in mediation with holdouts in recent weeks, working to bring in more support.
Under the deal, the Boy Scouts would establish a $2.7 billion trust to compensate men who have said they were sexually abused as children by troop leaders. In 2020, the Boy Scouts filed for Chapter 11 protection – allowing for reorganization under U.S. bankruptcy laws – in Delaware to resolve decades of abuse allegations.
Flood of lawsuits
While the assent of two-thirds of creditors is all that is typically required for a Chapter 11 plan, judges often look for “overwhelming” creditor support in large, complex Chapter 11 cases before signing off on them.
The money for the trust is coming from the Boy Scouts, local councils, insurers and organizations that have chartered Scouting units and activities, including churches.
The Boy Scouts filed for bankruptcy in 2020 after being hit by a flood of sexual abuse lawsuits when several U.S. states passed laws letting accusers sue over allegations dating back several decades. Those claimants are now creditors of the organization, so they must sign off on any plans to restructure and exit bankruptcy.
Groups representing survivors have disagreed over whether the settlement total is large enough. Some victims and plaintiffs’ attorneys have said that the average payout per person under the deal would be far lower than other sex abuse cases, like that of USA Gymnastics.
The amount of money each of the survivors would receive depends on the severity of the alleged abuse, as well as when and where it occurred, among other factors. They could receive as little as $3,500 or up to $2.7 million for the most severe cases, according to court papers.
Survivors have sent Silverstein thousands of letters, many of which include stories of abuse or frustration with the settlement offer.
A group called the Coalition of Abused Scouts for Justice has been a longtime proponent of the plan, while the official committee had maintained that it offered too little, considering the large number of surviving victims who would be sharing the settlement sum.