BOY SCOUTS OF AMERICA CUTS $850M DEAL WITH SEX ABUSE VICTIMS

The Boy Scouts of America (BSA) has reached an $850 million agreement with attorneys representing some 60,000 victims of child sex abuse in what could prove to be a pivotal moment in the organization’s bankruptcy case, Randall Chase reported for the Associated Press (AP).

The agreement filed in court by BSA attorneys late Thursday would mark one of the largest sums in US history involving cases of sexual abuse. The filing, known as a restructuring support agreement (RSA), includes the BSA, abuse victims, local Boy Scouts councils and lawyers appointed to represent victims who might file future claims.

“After months of intensive negotiations, the debtors have reached a resolution with every single official and major creditor constituency,” BSA attorneys wrote. BSA sought bankruptcy protection in February 2020, moving to halt hundreds of lawsuits by men who were molested as youngsters decades ago by scoutmasters or other leaders.

The filing was intended to try to reach a global resolution of abuse claims and create a compensation fund for victims. But attorneys for the Irving, Texas-based BSA had previously been unable to reach an agreement with victims, local Boy Scout councils and insurers on how to compensate victims while allowing the 111-year-old organization to continue operating.

Thursday’s agreement signals the BSA’s acknowledgment that disagreements remain between attorneys representing abuse victims and those representing the BSA’s insurers. In an earlier court filing Thursday, attorneys for certain insurance companies accused the BSA of allowing attorneys for abuse victims to rewrite the BSA’s restructuring plan to favor their clients.

“With only the fox guarding the henhouse, the outcome is utterly at odds with what BSA itself asserted was necessary for a confirmable plan and is permissible under the bankruptcy code,” the insurers wrote.

Attorneys for insurers appear to be concerned that decisions regarding insurance coverage issues would be made without their input. Meanwhile, attorneys for BSA are also asking for US Bankruptcy Judge Laurie Selber Silverstein to declare that they have no obligation to seek court approval of a previously announced settlement with The Hartford, one of the BSA’s insurers.

The Hartford agreed to pay $650 million into the victims’ trust in exchange for being released from any further obligations under policies dating to 1971. The Hartford settlement was roundly criticized by attorneys for abuse victims, who estimate the insurer’s liability exposure at several billion dollars. They made it clear that victims would not support any plan that includes the Hartford settlement.

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