By: Randall Chase, Associated Press
CHILD SEX ABUSE
The Boy Scouts of America have 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.
The agreement filed in court by BSA attorneys late Thursday would mark one of the largest sums in U.S. history involving cases of sexual abuse. The filing, known as a restructuring support agreement, 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 resolution with every single official and major creditor constituency,” BSA attorneys wrote.
The Boy Scouts of America 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 agreement with victims, local Boy Scout councils and insurers on how to compensate victims while allowing the 111-year-old organization to continue operating.
What it means
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, among other things, that decisions regarding insurance coverage issues would be made without their input.
Meanwhile, attorneys for the Boy Scouts are also asking for U.S. 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.
The Boy Scouts have said that between $2.4 billion and $7.1 billion, including insurance rights, might be available for abuse victims. Attorneys for a committee that acts as a fiduciary representative of all victims in the bankruptcy case have estimated the value of some 82,500 sexual abuse claims at about $103 billion.
In a revised plan submitted barely two weeks ago, the BSA offered to issue an $80 million promissory note to a trust fund for abuse victims. It also proposed maneuvers to make up to $50 million in additional cash available for abuse survivors. The proposed changes would increase the BSA’s proposed contribution to as much as roughly $250 million, more than doubling a prior plan.
Under a new plan expected to be filed Friday, the BSA’s 250-odd local councils would contribute $600 million into the fund for abuse victims, doubling an offer from earlier this year. Under the plan, the BSA and local councils would be released from liability in return for their contributions to the victims fund.
A hearing in the case is schedule for July 20.
What metro Atlantans are saying
Esther Panitch, an Atlanta-area attorney who is representing people who have filed claims against the Boy Scouts, told The Atlanta Journal-Constitution the agreement is “the best that the survivors are going to get from the Boy Scouts, so much so that the art is coming off the walls to satisfy the settlement.”
Among the people Panitch represents is Robb Lawson, a Gainesville man who has alleged he was sexually assaulted by a scoutmaster while he was on a Boy Scout outing at Rainey Mountain’s Mowogo Lodge.
“Now the insurance companies have to pay up,” Panitch said. “They have been skirting their responsibilities for decades to survivors. Now that the Boy Scouts and all the survivor groups are aligned, we are all on the same side of the fight to get every dollar from insurance that the survivors are entitled to.”
Emma Hetherington, director of the Wilbanks Child Endangerment and Sexual Exploitation Clinic at the University of Georgia’s School of Law, said the compensation could cover therapy, medical care and lost income. She underscored many people have filed claims for “justice, for closure, to have their day in court, to have their voices heard.”
“Often, they file claims because they realize their abusers still have access to children and they want to be able to stop that person from being able to access children,” she said.
Hetherington called the agreement a step in the right direction.
“But does it actually provide justice to survivors who have very little access to the justice system?” she asked.
AJC staff writer Jeremy Redmon contributed to this report.