The Boy Scouts of America has filed for bankruptcy protection in the hope of working out a potentially mammoth victim compensation plan amid hundreds of sex-abuse lawsuits..
The Chapter 11 filing in federal bankruptcy court in Wilmington, Delaware, on Tuesday sets in motion what could be one of the biggest, most complex bankruptcies ever seen. Scores of lawyers are seeking settlements on behalf of several thousand men who say they were molested as scouts by scoutmasters or other leaders decades ago but are only now eligible to sue because of recent changes in their states’ statute-of-limitations laws.
By going to bankruptcy court, the Scouts can put those lawsuits on hold for now. But ultimately they could be forced to sell off some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation fund that could surpass a billion dollars.
“Scouting programs will continue throughout this process and for many years to come,” said Evan Roberts, a spokesman for the Scouts. ”Local councils are not filing for bankruptcy because they are legally separate and distinct organizations.””
The Boy Scouts are just the latest major American institution to face a heavy price over sexual abuse. Roman Catholic dioceses across the country and schools such as Penn State and Michigan State have paid out hundreds of millions of dollars in recent years.
The Boy Scouts’ finances have been strained in recent years by declining membership and sex-abuse settlements.
The number of youths taking part in scouting has dropped below 2 million, down from more than 4 million in peak years of the 1970s. The organization has tried to counter the decline by admitting girls, but its membership rolls took a big hit on 1 January when The Church of Jesus Christ of Latter-day Saints — for decades a major sponsor of Boy Scout units — cut ties and withdrew more than 400,000 scouts in favor of programs of its own.
The financial outlook had worsened in 2019 after New York, Arizona, New Jersey and California passed laws making it easier for victims of long-ago abuse to file claims. Teams of lawyers across the US have been signing up clients by the hundreds to sue the Boy Scouts.
Most of the newly surfacing cases date to the 1960s, ’70s and ’80s; the organization says there were five known abuse victims in 2018.
Among the matters to be addressed in bankruptcy court: the fate of the Boy Scouts’ assets; the extent to which the organization’s insurance will help cover compensation; and whether assets of the Scouts’ more than 260 local councils will be added to the fund.
“There are a lot of very angry, resentful men out there who will not allow the Boy Scouts to get away without saying what all their assets are,” said lawyer Paul Mones, who represents numerous clients suing the BSA. “They want no stone unturned.”