The Boy Scouts of America reached a $850 million US agreement with lawyers representing approximately 60,000 child sexual abuse victims, and this may be a critical moment in the organization’s bankruptcy.

The agreement submitted by the BSA lawyers in court on Thursday night will be one of the largest cases involving sexual abuse in American history. The document, known as the Reorganization Support Agreement, includes the BSA, the abuse victim, the local Boy Scout committee, and the lawyers appointed to represent the victims who may make future claims.

“After months of intense negotiations, the debtor has reached a settlement with every official and major creditor constituency,” the BSA lawyer wrote.

The Boy Scouts of America sought bankruptcy protection in February 2020 to stop hundreds of lawsuits against men who were harassed by Boy Scouts or other leaders when they were young decades ago. The document aims to try to reach a global solution to abuse claims and to establish a compensation fund for victims.

But attorneys for BSA, based in Irvine, Texas, have been unable to reach an agreement with the victim, the local Boy Scout committee, and the insurance company on how to allow the 111-year-old organization to continue operating while compensating the victim.

Thursday’s agreement shows that BSA acknowledges that there are still disagreements between lawyers representing abuse victims and lawyers representing the BSA insurance company.

In a court document filed earlier on Thursday, lawyers from certain insurance companies accused BSA of allowing lawyers who abuse victims to rewrite BSA’s restructuring plan to benefit their clients.

The insurance company wrote: “Since only foxes guard the chicken coop, the result is completely inconsistent with what BSA claims is necessary for a verifiable plan and permitted by the bankruptcy law.”

The insurance company’s lawyers seem to worry that, among other things, decisions about insurance coverage will be made without their opinion.

The previous settlement with the insurance company

At the same time, the Boy Scouts’ lawyers also asked the U.S. bankruptcy judge Laurie Selber Silverstein to declare that they were not obliged to seek court approval for the previously announced agreement with BSA’s insurance company Hartford. A settlement agreement reached by Germany.

Hartford agreed to pay $650 million to the victim’s trust in exchange for any further obligations under the 1971 policy.

The Hartford settlement was severely criticized by lawyers for abuse victims, who estimated that the insurance company’s liability risk was billions of dollars. They made it clear that the victims would not support any plan including the Hartford settlement.

The Boy Scouts stated that victims of abuse may receive between US$2.4 billion and US$7.1 billion, including insurance rights. The lawyers of the committee, which acted as the trusted representative of all victims in bankruptcy cases, estimate that approximately 82,500 sexual abuse claims are worth approximately $103 billion.

Matthew Sturdevant, spokesperson for The Hartford, said that the agreement between the company and the Boy Scouts “is a key component that drives this bankruptcy case to an end.”

Studwant said in an e-mail: “We are disappointed that the Boy Scouts of America chose to ignore the organization’s creed of keeping its promises and try to abandon the deliberate and mutually agreed agreement that appropriately values ??Hartford’s obligations. “

Exempt from liability

In a joint statement, representatives of victims and representatives of future claimants stated that the reorganization support agreement will free the Boy Scouts from bankruptcy, “at the same time provide meaningful compensation to the victims and enable the Boy Scouts’ insurance company to comply with the bankruptcy protection order. Terms. Insurance policies purchased by the Boy Scouts and their affiliates for decades.”

In the revised plan submitted two weeks ago, BSA proposed to issue a US $80 million promissory note to the abuse victims trust fund. It also proposed measures to provide up to $50 million in additional cash to abuse survivors. The proposed changes will increase BSA’s proposed donation to approximately $250 million, more than double the previous plan.

According to a new plan that is expected to be submitted on Friday, BSA’s more than 250 local councils will donate US$600 million to the abuse victims fund, doubling the bid earlier this year. According to the plan, BSA and local councils will be exempted from liability in exchange for their contribution to the Victim Fund.

A hearing on this case is scheduled for July 20th.


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