Boy Scouts of America Reaches Critical Deal with Victims | Business

Dover, Delaware (AP) — Boy Scouts of America agrees with lawyers representing about 60,000 victims of child sexual abuse, which could prove to be a pivotal moment in the bankruptcy case. an organization.

BSA lawyers filed court documents Thursday evening describing a Restructuring Assistance Agreement (RSA) with lawyers representing victims of abuse. The agreement includes both an official Complainants Committee which acts as the bankruptcy trustee for all victims of abuse and another group of plaintiffs called the Abused Scout Alliance. It also includes attorneys representing the local Boy Scout Council and attorneys appointed to represent victims who may make future claims.

“After months of intensive negotiations, the debtor has reached a resolution with all the public and key creditor members in these Chapter 11 proceedings,” said a lawyer for BSA. writing.

The agreement represents BSA’s approval that the gap between lawyers representing abuse victims and lawyers representing BSA insurers is currently too wide to close. They are most likely left to resolve their differences in future court battles, which BSA was trying to avoid.

The Boy Scouts of America, based in Irving, Texas, filed for bankruptcy protection in February 2020, stayed hundreds of proceedings, and were abused as children by the Scout Masters and other leaders there. decades ago. Creation of a compensation fund for.

However, BSA lawyers fail to come to an agreement with victims’ lawyers, local councils and BSA sponsorships and insurance companies on a global resolution to compensate victims of abuse while suing. the activities of the Boy Scouts of America. has been.

In a previous court filed Thursday, lawyers for some insurance companies accused BSA of allowing lawyers for victims of abuse to rewrite BSA’s restructuring plans to include favorable terms for clients. ..

“Since only the foxes protect the hen house, the results are in total contradiction to what the BSA itself claimed to be necessary for a verifiable and tolerated plan under bankruptcy law,” the insurance company said. . writing.

Lawyers for the insurers appear particularly concerned that BSA’s liability for abuse claims will be determined based on the proposed trust allocation procedure to determine the issue of insurance coverage.

Meanwhile, as part of the Restructuring Support deal, Boy Scout’s lawyer told US bankruptcy judge Laurie Selber Silverstein in court about a previously announced settlement with one of BSA’s insurers, Hartford. . We ask that you state that you are not obligated to seek approval.

Hartford agreed to pay the victim’s trust $ 650 million in return for being released from further obligations under the 1971 policy. This agreement allowed Hartford to pay less if the BSA or the settlement trust succeeded. to a deal with another major. Insurers BSA, Century Insurance Group and Century pay twice as much as Hartford – less than $ 1.3 billion.

The Hartford settlement has come under heavy criticism from abuse attorneys, who estimate that insurers’ liability exposure is in the billions of dollars. They revealed that the victims did not support any plan, including the Hartford settlement.

The Japan Scout Association says victims of abuse can access $ 2.4 billion to $ 7.1 billion, including insurance fees. Lawyers for the Tort Claims Commission (TCC) estimate the value of about 82,500 sexual abuse claims to be about $ 103 billion.

“All representatives of the plaintiffs, who represent the majority of holders of direct abuse claims, have shown that any plans, including the Hartford settlement, will be categorically rejected,” a BSA lawyer wrote in a court filing Thursday. It was. “Without their support, it seems unnecessary to be forced to pursue a plan which incorporates the Hartford settlement.”

In a joint statement, the coalition, the CTC and future plaintiffs’ representatives said the Restructuring Assistance Agreement would allow Scouts to escape bankruptcy while “providing meaningful compensation for victims and insurance for victims. The scouts. An insurance policy that the company bought by the Boy Scouts and their affiliates for decades. “

In a revised plan submitted just two weeks ago, BSA offered to issue an $ 80 million unsecured promissory note to a trust fund for victims of abuse. He also proposed to use restricted assets to cover post-bankruptcy operating costs. This will bring up to $ 50 million in unlimited cash available to abused survivors. This change will increase BSA’s proposed trust fund contributions over the previous plan from about $ 120 million to about $ 250 million.

As part of a new plan to be submitted on Friday, the more than 250 local BSA councils have donated $ 600 million to a fund for victims of abuse, doubling the supply by $ 300 million since the beginning of the year. At least half of the council’s donations will be in cash.

In return for contributions to the trust fund and the transfer of insurance rights, BSA and the local council are released from their liability. Sponsoring organizations such as churches and citizenships may also be released from additional responsibilities in exchange for donations of funds and transfer of insurance rights.

The hearing of the case is scheduled for July 20.

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