The Boy Scouts of America have agreed to a milestone settlement of $ 850 million as part of a restructuring of its bankruptcy case that lawyers representing some 60,000 victims of sexual abuse say will provide “significant compensation” .
Under the agreement with lawyers for several victim groups, the BSA would cede the insurance rights to a trust that would process claims and pay victims. The Boy Scouts of America would pay $ 250 million, and the organization’s local boards, or franchises, would pay at least $ 600 million. Victims could still sue insurers and old insurers for payments.
The settlement will allow BSA to escape bankruptcy “while providing meaningful compensation to victims and forcing Boy Scout insurers to abide by the terms of insurance policies underwritten by Boy Scouts and their affiliates for many decades.” , said lawyers representing all victim groups. in a joint statement.
Court documents filed in Delaware bankruptcy court on Thursday showed the deal included the official committee of civil liability claimants and another group called the Coalition of Abused Scouts for Justice. Lawyers representing local Scout councils and lawyers responsible for representing future plaintiffs were also part of the deal.
Thursday’s deal signals that the BSA recognizes that the gap between its insurers and victims’ lawyers is too wide to be resolved, after failing to find a comprehensive resolution that would pay victims and allow the national organization to continue.
“After months of intensive negotiations, the debtors have reached a resolution with every official party and major creditor in these Chapter 11 cases,” the BSA lawyers wrote.
Some insurance companies involved accused the BSA of letting representatives of victims of abuse restructure the deal, in a court case earlier Thursday.
“With only the fox guarding the hen house, the result is totally at odds with what BSA herself has claimed is necessary for a confirmable plan and is licensed under the bankruptcy code,” the insurers wrote.
Boy Scout lawyers have asked a bankruptcy judge to rule the organization does not have to seek court approval for the Hartford settlement, a pre-agreement with insurers that released it from any obligation additional and capped payments at a value that victims reported undervalued.
The BSA said that in total, between $ 2.4 billion and $ 7.1 billion could be available for around 82,500 victims. ICC attorneys put the number at $ 103 billion.
The BSA filed for bankruptcy protection last year as sex abuse payments and declining membership decimated its funds. In the process, hundreds of lawsuit payments were halted in favor of a large compensation fund.
“All of the plaintiffs’ representatives, who represent the vast majority of holders of direct abuse claims, have indicated that any plan containing the Hartford settlement would be categorically rejected,” the BSA court record reads. “Without their support, being forced to pursue a plan that incorporates the Hartford Colony seems futile.”
In a statement Thursday, Kenneth Rothweiler, a lawyer representing 16,000 survivors, said he was “happy that the BSA and its local councils have mobilized to be the first to compensate survivors.”
“We will now negotiate with insurers and sponsorship and charter organizations that have billions of dollars in legal exposure, a substantial portion of which is needed to fairly compensate survivors.”
The majority of cases date back decades, before the BSA instituted a policy of having scouts supervised by two adults in the late 1980s.
In a 2019 court file, a plaintiff said he was preyed upon in the 1970s by a deputy scout leader who “actively cared for young boys in his charge for subsequent sexual assaults.”
The accuser said that at the age of 12 or 13 he had experienced “hundreds of cases of fondling, hundreds of incidents of oral sexual assault and repeated attempts at anal penetration” during a scout retreat and at the home of his accuser.
A Thursday settlement hearing is scheduled for July 20.
With AP wires