Judge moves forward with key Boy Scouts bankruptcy hearing

A Delaware judge on Tuesday refused to delay a key hearing that could determine whether the Boy Scouts of America can come out of bankruptcy information later this year with a reorganization plan that would compensate thousands of men who say they have been sexually abused in their homes. childhood.

The Boy Scouts, based in Irving, Texas, filed for bankruptcy protection in February 2020, seeking to end hundreds of individual lawsuits and create a fund for men who say they were assaulted during their childhood by scout leaders and others. Although the organization faced 275 lawsuits at the time, it now faces some 82,500 sexual abuse claims in the bankruptcy case.

Tuesday’s hearing was scheduled over a month ago for the judge to consider whether the Boy Scouts’ explanation of a reorganization plan filed in July provided enough information for abuse claimants and others. creditors.

Several key stakeholders have asked Judge Laura Selber Silverstein to postpone the hearing for at least three weeks to give them time to consider and file objections to a new plan tabled just days ago. The delay was requested by the official committee appointed to represent abuse claimants, as well as by several law firms and insurance companies. The U.S. bankruptcy information trustee also said a delay was justified given unanswered questions about the new plan and the filing of hundreds of pages of plan documents on the eve of the Jewish holiday of Yom Kippur.

Silverstein declined to delay the hearing, during which it must determine whether a disclosure statement outlining the BSA’s reorganization plan contains enough detail to ensure that victims of abuse can make informed decisions about whether to accept. or rejection.

“I am very sensitive to when the documents were filed and the timeframe within which lawyers had to review the documents,” Silverstein said. “But we have to start with the many objections that have already been filed. ”

“More information, unless it is important information, is not always the best, … but we can add the information necessary for this disclosure statement to contain adequate information,” added the judge.

Silverstein must approve the BSA’s disclosure statement before the Boy Scouts can send ballots to abuse claimants and other creditors to vote on his proposed plan.

Two of the major changes in the new plan are settlement agreements involving one of the organization’s main insurers, The Hartford, and its former largest troop sponsor, The Church of Jesus Christ of Latter-day Saints, commonly referred to as the Mormon Church.

The Hartford has agreed to pay $ 787 million into a fund for sexual abuse claimants, and the Mormon Church has agreed to contribute $ 250 million. In return, the two entities would be released from any further responsibility for child sexual abuse complaints filed by men who said they were assaulted decades ago by Scout leaders and others.

The official committee, which estimated the liability exposure of Boy Scouts insurers at more than $ 100 billion, described the regulations as “grossly unfair”.

The new plan, for the first time, provides details of the proposed cash and property contributions totaling $ 500 million to the 251 Local Boy Scout Council Fund, which manages the day-to-day operations of the BSA.

In return for combined contributions totaling up to $ 820 million and the cession of certain insurance rights to the fund, local councils and the national Boy Scout organization would be released from any additional liability for abuse claims.

The official committee believes that local councils have the financial capacity to contribute “many multiples” of what they offer.

The new BSA plan also includes provisions under which tens of thousands of churches, civic groups and other sponsors of local scout troops could be released from liability for sexual abuse claims.

An approved sponsoring organization could obtain full liability relief in exchange for the cession of its insurance rights and a large cash contribution to the fund. A transfer of insurance rights, without financial contribution, would result in a limited exemption from liability. A sponsoring organization could also refuse to participate and retain its insurance rights, but it would not be protected against future litigation involving claims of abuse.

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