A Delaware judge on Tuesday pushed forward with proceedings that could determine whether the Boy Scouts of America will be able to emerge from chapter 11 bankruptcy this year with a plan to settle thousands of lawsuits by men who claim they were sexually abused in the youth organization.
The Irving, Texas, organization had sought bankruptcy protection in February 2020 following a wave of lawsuits by members who claimed they were abused as boys.
At the time, the youth organization had billions of dollars in cash, land, buildings, and other investments to protect. By filing, the organization was able to halt pending lawsuits and buy time to negotiate settlements with large numbers of individual claimants.
MORMON CHURCH HIT WITH SEVEN LAWSUITS ALLEGING BOY SCOUTS ABUSE COVER-UP
When the bankruptcy proceedings began, the Boy Scouts had about 275 pending lawsuits alleging sexual misconduct by employees or volunteers and 1,400 other known abuse claims. Since then, the number of claims has jumped to more than 82,500 after the youth group urged victims to come forward and file claims.
During Tuesday’s hearing, Judge Laura Silverstein decided to move forward with a hearing that would consider whether the Boy Scouts’ explanation of a reorganization plan that was filed in July had provided enough information for abuse claimants and other creditors.
Several key stakeholders, the U.S. bankruptcy trustee, law firms, and insurance companies had asked Silverstein to postpone the hearing so they could review the reorganization plan in detail and file objections if needed.
Silverstein refused to delay the hearing, at which she will determine whether a disclosure settlement contains sufficient details to ensure that claimants can make an informed decision on whether to accept the plan or reject it.
“I am very sensitive to the timing of the filing of the documents and the time frame in which attorneys have had to review the documents,” she said. “But we need to start on the many objections that have already been filed.”
MORE THAN 81,000 SEX ABUSE CLAIMS MADE AGAINST BOY SCOUTS
Sex abuse claims had dented the reputation of the Boy Scouts for years, but they skyrocketed after the 2012 court-ordered release of internal files on reports of abuse.
The chapter 11 filing covered the national Boy Scouts organization but excluded 250 affiliated local councils across the country that held the bulk of the 111-year-old organization’s wealth. Part of the chapter 11 strategy was to weaken the financial blow for the local councils.
On Sept. 14, the Boy Scouts signed deals totaling more than $1 billion with Hartford Financial Services Group Inc., one of its largest insurers, and the Church of Jesus Christ of Latter-day Saints, which had been a longtime supporter of its activities. The settlements of $787 million and $250 million, respectively, were made as Hartford and the church worked to shield themselves from further payouts.
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The new settlements, plus $820 million slated to come from the Boy Scouts national organization and its local councils, add up to $1.86 billion, or $23,000 per victim.
Some victims claim that the payouts aren’t high enough and have filed objections.
