A bankruptcy judge approved a $2.46 billion reorganization plan for the Boy Scouts on September 8, 2022. This approval of the billion-dollar settlement allows the Boy Scouts to exit Chapter 11 bankruptcy so it can continue operating while compensating tens of thousands of scouts who claim they suffered sexual abuse during their time with the organization. At the beginning of August, the judge rejected parts of the proposed sexual abuse deal which delayed the group’s emergence from bankruptcy. This $2.46 billion trust will compensate more than 80,000 men who claim they endured sexual abuse as children from troop leaders and other members of the Boy Scouts.
Boy Scouts Filed for Bankruptcy Nearly Two Years Ago
In February 2020, the Boy Scouts filed for bankruptcy protection in light of mounting lawsuits filed by individuals who allege they were sexually abused as scouts. The costly litigation forced the organization to enter Chapter 11 bankruptcy protection as more individuals continued to come forward with sexual abuse allegations. Only the national organization filed for bankruptcy, while financially independent local chapters could continue to provide services. Also, per this filing, the Boy Scouts created a Victims Compensation Trust through the bankruptcy process to fairly compensate the sexual abuse victims.
However, this proved challenging and complex due to the sheer number of lawsuits. Legal experts deemed this bankruptcy a historic filing as it far surpassed the bankruptcies filed by the Catholic Church concerning its sexual abuse scandals.
Boy Scouts to Exit Bankruptcy After Judge Approves Sexual Abuse Settlement
In early August 2022, U.S. Bankruptcy Judge Laurie Selber Silverstein rejected certain aspects of the Boy Scouts’ proposed bankruptcy plan and settlement. Although Silverstein approved most aspects of the plan, she refused to greenlight a $250 million settlement between the Boy Scouts and the Church of Jesus Christ of Latter-day Saints or matters related to Boy Scouts’ insurance coverage. Judge Silverstein believed that the settlement unfairly protected the Mormon church from sexual abuse claims that were only loosely connected to the Boy Scouts. The Boy Scouts removed this portion of the plan, and on September 8, Judge Silverstein signed off on the restructuring plan.
The Coalition of Abused Scouts for Justice stated that this $2.46 billion trust is the largest sexual abuse settlement fund in history. Survivors can receive anywhere between $3,500 to $2.7 million from the fund, but the exact compensation depends on the extent of abuse and when it took place, among other factors. The plan specifies that the Boy Scouts and its local councils, settling insurance companies, and troop sponsoring organizations will contribute to the fund for survivors. Before any survivors can receive compensation, a federal district judge must still sign off on Silverstein’s approval. Also, some insurers stated that they intend to appeal the settlement.