Boy Scouts Bankruptcy
We have been helping survivors of child sexual abuse for more than 20 years, including many cases against the Boy Scouts . In 2020 we filed more lawsuits against the Boy Scouts than any other law firm or lawyer in the country because we are trial lawyers — we are not “mass tort” or class action lawyers who rarely take cases to trial. While our clients always decide whether to settle or go to trial, the defendants know that we do not shy away from trial and we will support our clients and whatever decision they make.
We built this website years ago, long before the Boy Scouts filed for bankruptcy. The purpose of this website was to share information with people who want learn about the problem of sexual abuse in Scouting, and it now includes important information about the Boy Scout bankruptcy.
New Proposed Settlement Worse Than the Last: On September 14, 2021, a new proposed settlement was announced between the Boy Scouts, its local councils, the Mormon Church, and Hartford insurance company. The new proposed settlement is worse than the last settlement. If you read about a “historic” settlement, it is historic only because it would be the worst settlement in the history of child sexual abuse litigation and bankruptcies. Please click here to read more about this settlement that might be good for some lawyers but would be very bad for abuse survivors.
Bankruptcy Court Rejects Key Portions of BSA’s Proposed Settlement and Foresees “Epic Confirmation Fight”: On August 20, 2021, the bankruptcy court rejected key parts of the BSA’s proposed settlement, and noted BSA appears headed toward an “epic confirmation fight” if it does not take meaningful steps to address the objections raised by abuse survivors, insurers, and charter organizations. The judge did not approve the BSA’s proposed settlement in any way, shape, or form:
“Let me emphasize the limited nature of my ruling today. I am being asked to approve Debtor’s entry into the RSA. I am not approving the term sheet, the fourth amended plan, any disclosure statement, or anything else, and the order I entered today does not suggest that I will do so or need to do so.”
She also cautioned that she may ultimately find that BSA was “wrong” to enter into a settlement agreement with some parties and she may reject some or all of BSA’s proposed plan:
“As I said in argument, a Court is particularly ill-suited to address strategic business decisions such as this one. Debtors may ultimately be wrong in their assessment, but that is not the test of business judgment. While in the words of Ms. Lauria, unless there are further resolutions, this case is headed toward an epic confirmation fight. Debtors choice of which fights to have is due some deference. Ultimately, whether any plan is confirmable is my decision.”
You can read the entirety of Judge Silverstein’s ruling by clicking here.
The Boy Scouts’ Latest Proposal Raises Serious Concerns for Abuse Survivors: On July 1, 2021, the Boy Scouts announced a new proposal that would allow the Boy Scouts and their local councils to pay around $850 million to approximately 82,500 abuse survivors. While $850 million may sound like a lot of money, such a settlement would result in abuse survivors receiving an average of around $10,000 from the Boy Scouts and their local councils. Such compensation would be on the low end of how much has been paid in prior sexual abuse bankruptcies, if not the lowest by a wide margin. Moreover, the Boy Scouts recently disclosed that the local councils have more than $1.8 billion in unrestricted net assets that could be available to pay abuse survivors, but the councils are collectively paying just $600 million. The local councils in California, alone, are likely able to pay more than what the Boy Scouts are currently offering for all 250+ local councils in the country.
If you filed a claim in the Boy Scout bankruptcy, and if you are represented by an attorney, please ask the attorney if they support this proposal, and if so, why they support it. We and other law firms are going to demand that the Boy Scouts be transparent and tell abuse survivors how much each council is contributing, and if they are not contributing all of their unrestricted net assets, why not. Abuse survivors deserve to know this very basic information before they decide whether to vote “yes” or “no” regarding this latest proposal. If your attorney has questions, please ask them to contact us.
Boy Scout Claim Numbers by State, Council, and Chartering Organization: On March 11, 2021, the “Tort Claimants Committee,” which is a committee of abuse survivors appointed by the bankruptcy court to represent the interests of all abuse survivors, published a report that details the approximate number of claims filed in each state, the number of claims filed against each local council, and the number of claims filed against each chartering organization. You can read the full report by clicking here (clicking this link will open a new browser window with the TCC’s report).
The TCC’s report illustrates the exposure faced by the local councils and chartering organizations. For example, some local councils are facing over 1,000 claims, including the Michigan Crossroads Council (1,440 claims), the Greater New York Council (1,304 claims), the Pathway to Adventure Council (1,294 claims), and the Greater Los Angeles Council (1,136 claims). The report notes that these claim numbers will likely increase, possibly by significant amounts, because roughly 39,177 claimants did not identify a local council in their claim form.
The TCC’s report makes it very clear that abuse survivors must demand that every local council disclose how much it is proposing to pay into the Boy Scout bankruptcy if it wants a release of the claims against it. No local council should receive a release of liability without paying a fair amount based on their legal exposure.
While much attention has been paid to the 85,000+ claims that were filed nationwide, the TCC’s report reflects the massive number of claims in each state, including 9,346 in California, 5,252 in Texas, 5,178 in New York, 3,592 in Illinois, 3,372 in Florida, 3,352 in Ohio, and 3,053 in Pennsylvania. Again, the TCC’s report notes that these numbers are likely low because approximately 7,186 claims did not provide a location of abuse.
Many abuse survivors remain unaware that they likely have a claim against the local council and/or chartering organization that was responsible for their Scouting unit. More importantly, many abuse survivors also do not realize that they may need to take steps to protect their legal rights against those entities — filing a claim in the bankruptcy court did not protect those rights. If you need more information about these issues please contact us to make sure you know your legal options, and be aware that some lawyers are not advising their clients of these claims or the need to take steps to protect them.
Boy Scouts File Proposed Bankruptcy Plan: On March 1, 2021, the Boy Scouts filed their proposed plan to emerge from bankruptcy. You can download and read a copy by clicking here (opens new browser window).
The Boy Scouts are proposing to pay about $220 million in cash, plus an assignment of their insurance policies. With approximately 85,000 claims in the bankruptcy, that works out to an average of $2,588 per abuse survivor. The Boy Scouts also want their “local councils” (separate legal entities) to pay at least $300 million in cash, plus an assignment of their insurance policies. That works out to an average of $3,529.41 per abuse survivor. All told, BSA is proposing to pay abuse survivors an average of a little over $6,000, plus an assignment of insurance policies.
We do not support this plan and we will advise our clients to reject it. Many of the BSA councils have tens of millions of dollars in assets — the local councils in California, alone, have reported over $250 million in assets. Perhaps the most disturbing part of BSA’s proposed plan is that it fails to tell people how much each council is contributing, and how many claims there are against each council, so that people can determine whether their local council is paying a fair amount.
Choose a Law Firm Who Will Protect *All* of Your Rights: Many people who were abused by a Scout leader, or as a result of the Scouting program, have separate legal claims against three different entities: the national Boy Scouts of America, the “local council” of the Boy Scouts who oversaw their Scouting unit, and the “sponsoring organization” that sponsored or chartered their Scouting unit (usually a church, school, or other youth-serving organization). If you have not been advised of your possible legal rights against a “local council” and a “sponsoring organization,” or if a lawyer is only representing you “in the bankruptcy,” please contact us to make sure you understand all of your legal rights (and keep reading).
Although the Boy Scouts (national) knew for decades that men were using their positions as Scout leaders or volunteers to groom and to sexually abuse children, the local councils and sponsoring organizations were most often the ones who received complaints about a specific Scout leader and ignored them, or saw “red flags” about a Scout leader and ignored them. Those entities are just as responsible, if not more responsible, than the national Boy Scouts. Many of them, like the Mormon Church, the Catholic Church, and the Methodist Church, were well aware of the danger of child sexual abuse because of their own problems with their leaders and members abusing children.
The national Boy Scouts of America is the entity that filed for bankruptcy, but the local councils and the sponsoring organizations are currently *not* a part of the Boy Scout bankruptcy. This means many people need to take separate legal action to protect their claims against the local councils and sponsoring organizations who may be responsible for their abuse because those claims may *not* be compensated in the bankruptcy. Moreover, if you have a claim against one or both of these entities, but did not timely file a claim in the bankruptcy, you can likely still pursue these claims.
If you are looking for an attorney, or already have an attorney, make sure you ask about all of your legal rights, make sure the attorney agrees to protect all of your rights, and make sure the attorney agrees to investigate and pursue any claim you may have for the abuse you suffered. Obviously you must be the one who decides which claim(s) you want to pursue, but you deserve an attorney who will explain all of your legal options so you can make an informed decision. We have heard some law firms are only willing to represent their clients “in the bankruptcy,” and that may mean those law firms are not taking steps to protect and pursue these claims you may have against these other entities.
As with hiring any professional, we recommend you interview multiple law firms, read the “fine print” of their contracts, and confirm in writing that they will protect all of your legal rights and pursue all of your legal claims if that is what you want them to do. If a law firm is only willing to help you in the bankruptcy, or suggests you don’t need to worry about any claim you may have against a local council or sponsoring organization, you may want to consider a different law firm. Please remember that almost any claim you have is governed by a statute of limitations — if a lawyer assumes all of your claims will be covered by the bankruptcy, and the lawyer is wrong, the statute of limitations may expire on your legal claims and you will lose your right to pursue those claims.
We will not comment on the practices of other other law firms other than to note that some firms have been accused of false and misleading advertising in their quest to sign up hundreds or thousands of clients, including failing to adequately inform their own clients of all of their legal rights. While we want all abuse survivors to be aware of the bankruptcy, we also want to make sure people are not misled about the bankruptcy, that they understand all of their legal rights, and that they choose which claims they want to pursue. A lawyer should not make that decision for their clients, and a lawyer should make sure their clients understand all of their rights so the client can choose which claims they want to pursue (or not pursue).
“Bar Date” Deadline for Claims: The bankruptcy court set November 16, 2020, as the “bar date” deadline for abuse survivors to file a claim in the bankruptcy against the national Boy Scouts of America. However, that November 2020 deadline does *not* cover any claim you may have against other entities who may be liable for the abuse you suffered, including the “local councils” of the Boy Scouts and any organization that sponsored your Troop. You must take separate action to protect your rights as to those entities, and you must take action before the statute of limitations expires. If you or someone you love may have a claim against the Boy Scouts the time to act is now. Please contact us to learn your legal options and to ensure your legal rights are protected.
Interviews Regarding the Boy Scouts Bankruptcy: Some of our clients have decided to speak out regarding the Boy Scouts bankruptcy and what it means to them. Our lawyers have also been featured in a number of news stories about the bankruptcy because of our long history of helping Boy Scout abuse survivors and our work in a large number of the Catholic bankruptcies. You can read or watch some of the stories by clicking on the links below:
- “Boy Scouts of America files for bankruptcy. Hundreds of sexual abuse lawsuits are now on hold” (CNN)
- “Boy Scouts seek bankruptcy, urge victims to step forward” (AP)
- “Boy Scouts of America files for bankruptcy amid sexual abuse lawsuits” (CBS)
- “Boy Scouts of America files for bankruptcy after sex abuse lawsuits” (Fox News)
- “Boy Scouts of America files for bankruptcy amid wave of potential lawsuits” (Washington Post)
- “Why the Boy Scouts Are Bankrupt and What It Means For Families” (Yahoo News)
What Does the Bankruptcy Mean for Abuse Survivors?
Below are answers to commonly asked questions by abuse survivors. Most importantly: if you were abused by a Scout leader please know a “bankruptcy” only means the Boy Scouts are facing so many lawsuits that they need a bankruptcy judge to decide a fair way to divide their substantial assets and insurance among the abuse survivors who file claims. A “bankruptcy” does not mean abuse survivors will receive no compensation if they file a claim. Some reports state the Boy Scouts have more than $1 billion in assets that may be available to compensate abuse survivors, plus their insurance.
The bankruptcy court set a November 2020 deadline for abuse survivors to file a claim in the bankruptcy. HOWEVER, you may still be able to pursue justice even if you missed that deadline because that deadline did NOT apply to the Boy Scout local councils or the “chartering organizations” who sponsored individual Boy Scout troops and Cub Scout packs. If you or someone you love was sexually abused by a Scout leader or someone associated with the Scouts please contact us to learn your options and to ensure your rights are protected.
Frequently Asked Questions
How Does a Bankruptcy Work for for Abuse Survivors?
Some of our lawyers have represented abuse survivors in a number of the Catholic bankruptcies, including the bankruptcies of the Christian Brothers, the Jesuits in the Northwest, the Diocese of Spokane, the Archdiocese of Milwaukee, and others, so the information on this page is based on our experience in those past bankruptcies. Please know what has happened in the past is no guarantee of what will happen with the Boy Scouts’ bankruptcy, but it will give you some sense of the common issues raised by these bankruptcies that involve abuse survivors.
Most importantly, a bankruptcy does not mean the Boy Scouts have no assets or that abuse survivors will automatically get nothing. To the contrary, the goal of a bankruptcy is to allow a bankruptcy judge to marshal the Boy Scouts’ cash, other assets, and insurance, and then ensure that abuse survivors are compensated in a way that is fair to everyone.
Moreover, the bankruptcy only applies to claims against the Boy Scouts of America (the national organization). It does not automatically apply to any claim you may have against the “local council” that was responsible for your Scouting unit, or the chartering organization that sponsored your Scouting unit. For that reason it is critically important that abuse survivors contact a lawyer to learn their legal options and to ensure all of their legal rights are protected.
Why Did the Boy Scouts File for Bankruptcy?
The Boy Scouts of America filed for bankruptcy in order to seek relief from the dozens of child sexual abuse lawsuits filed against it after statute of limitations reform in a number of states, including California, New York, and New Jersey. We filed many of the first lawsuits against the Boy Scouts in those states.
By filing for bankruptcy, all lawsuits against the Boy Scouts (national) are “stayed” (put on pause) and a bankruptcy judge is assigned to oversee all of the claims against them. Generally speaking, the bankruptcy judge is responsible for determining the Boy Scouts’ assets that are available to compensate abuse survivors, including cash, property, and insurance, and then deciding a fair way to use those assets to compensate abuse survivors.
The bankruptcy filing does NOT prevent abuse survivors from filing claims against the “local council” who was responsible for their Scouting unit or the “chartering organization” who sponsored their Scouting unit. Most abuse survivors may have claims against one or both entities, and you must take steps to protect any legal rights you may have against those entities. If you do not know about these claims, please contact us to make sure your legal rights are protected.
Doesn’t the Bankruptcy Mean the Boy Scouts Have No Assets?
The bankruptcy absolutely does not mean that the Boy Scouts have no assets or that abuse survivors will automatically receive no compensation. Instead, the purpose of a bankruptcy is to ensure that the Boy Scouts’ assets are fairly divided among its creditors, including survivors of sexual abuse who file claims in the bankruptcy. The first step in the bankruptcy is to determine what assets the Boy Scouts have to compensate abuse survivors, including cash, property, and insurance .
Does This Mean the Boy Scouts Will Automatically Shut Down?
No. There have been 20 Catholic bankruptcies across the United States, and one of the lead Catholic attorneys is now on record as admitting that the Catholic church has not had to shut down parishes or schools, or reduce their services, as a result of these bankruptcies. For example, most Catholic Dioceses own a significant amount of property, and rather than sell their property, they take out a loan against their property to help compensate abuse survivors. Moreover, insurance companies have contributed a significant amount toward the prior bankruptcies, such as an insurance company that paid more than $100 million toward the bankruptcy of the Jesuits. It is too early to tell how this bankruptcy will affect the Boy Scouts, but keep in mind that their membership numbers have been dwindling for many years.
Are Other Entities Involved, Like the Local Councils and Sponsoring Organizations?
If you have a claim against the Boy Scouts, you may also have a claim against other entities, such as the local council and the organization who sponsored your Troop. The bankruptcy has no impact on those claims and you must take steps to protect your legal rights as to those entities, including filing a lawsuit before the statute of limitations expires. This is another reason why it is important that abuse survivors act now and take steps to learn their options.