A Delaware bankruptcy judge allowed the Boy Scouts of America to move ahead with an $850 million piece of a restructuring agreement aimed at resolving tens of thousands of sexual abuse claims, while leaving unsettled a dispute over a major insurer’s proposed $650 million payout cap.
Faced with billions in potential claims from victims, BSA had previously announced, then dropped, agreement to a $650 million payment for releases of further liability from claims raised by more than 80,000 alleged abuse victims.
Instead, the national organization announced that it would go forward under an agreement with abuse claimants and unsecured creditors to create a pool for settlements, funded by a $250 million contribution from the national organization and $600 million from local councils.
The Boy Scouts sought Chapter 11 protection in February 2020, citing rising numbers of sexual abuse settlements and aiming to set up a long-term “mass tort” compensation structure. Estimates of potential claims have ranged as high as 95,000 since the Chapter 11 case began.
After the bankruptcy opened, the organization launched a nationwide campaign to reach 110 million Americans with information about the claim process.
Much of the group’s case has been marred by warring over sexual abuse claims solicitation practices, debtor asset disclosures and battles for control of proceedings.