Friday, June 17, 2022
HomeMust ReadWhy Did The Boy Scouts File For Bankruptcy

Why Did The Boy Scouts File For Bankruptcy

Boy Scouts Of America Files For Bankruptcy As It Faces Hundreds Of Sex

Boy Scouts of America Bankruptcy Explained
    • EmbedEmbed

    Faced with hundreds of sexual abuse lawsuits, the Boy Scouts of America filed for bankruptcy. Tony Gutierrez/APhide caption

    toggle caption

    Faced with hundreds of sexual abuse lawsuits, the Boy Scouts of America filed for bankruptcy.

    The Boy Scouts of America has filed for bankruptcy, a sign of the century-old organization’s financial instability as it faces some 300 lawsuits from men who say they were sexually abused as Scouts.

    The organization says it will use the Chapter 11 process to create a trust to provide compensation to victims. Scouting programs will continue throughout.

    The Boy Scouts had been exploring the possibility of bankruptcy since at least December 2018, when the group hired a law firm for a possible Chapter 11 filing. Chapter 11 usually involves the debtor making a reorganization plan to keep its business alive and pay its creditors over time.

    The filing was made in Delaware and is expected to set a new deadline for victims’ claims to be made.

    The Boy Scouts also published a carefully worded open letter to victims of abuse. The letter, signed by BSA National Chair Jim Turley, reads in part:

    The letter encourages people who were abused to come forward and file claims so they can receive compensation from the trust that will be created.

    The Boy Scouts’ potential liability is large. Mones points to just one case he won in Portland, Ore., in 2010, where the judgment against the organization was nearly $20 million.

    Will Local Councils Be Forced To Sell Assets

    This is a major point of dispute.

    The national organization describes its relationship with local councils as a type of franchise arrangement. The national group handles the development of Scouts content and structure, licensing, training, human resources, legal support and information technology.

    The local councils are separate legal entities, according to the national group.

    Local councils often own their own assets. Victims attorneys believe those assets should be included in the national bankruptcy.

    Boy Scouts Propose Victims Compensation Trust

    What bankruptcy does is force the debtor to evaluate its assets and use them to try to pay off its liabilities in the best interests of its creditors while attempting to stay afloat. In that respect, bankruptcy is designed to give organizations like the Boy Scouts a chance to start over.

    But at what expense for a group that bases its existence on treating others with dignity?

    “They have this internal code that dictates you behave in particular ways included among those is keeping your promises,” said Peter Jaworski, who teaches ethics at Georgetown University’s McDonough School of Business. “For the reasons theyve publicly said theyre filing for bankruptcy, it looks on its face like its a violation of the Boy Scouts code.”

    The Boy Scouts, which said it paid $150 million in settlements and legal costs from 2017 to 2019, plans to create a Victims Compensation Trust through the bankruptcy process to pay victims who file claims by an unspecified date to be set soon.

    New York state Sen. Brad Hoylman a former Eagle Scout and a Democrat who co-authored a law for sexual abuse survivors blasted the bankruptcy filing.

    Without bankruptcy, the Boy Scouts’ finances could have deteriorated rapidly as the cost of defending the organization against myriad lawsuits stacked up, potentially leading it to collapse.

    In that sense, she said, it could be a positive development for the victims.

    Read Also: How Many Bankruptcies Has Donald Trump Filed

    Boy Scouts Of America Files For Bankruptcy Due To Sex Abuse Lawsuits

    The Boy Scouts of America, barraged by hundreds of sex-abuse lawsuits, filed for bankruptcy protection Tuesday in hopes of working out a potentially mammoth victim compensation plan that would enable the hallowed, 110-year-old organization to carry on.

    The Chapter 11 filing in federal bankruptcy court in Wilmington, Delaware, sets in motion what could be one of the biggest, most complex bankruptcies ever seen. Scores of lawyers are seeking settlements on behalf of several thousand men who say they were molested by scoutmasters or other leaders decades ago but are only now eligible to sue because of recent changes in their states’ statute-of-limitations laws.

    By going to bankruptcy court, the Scouts can put those lawsuits on hold for now. But they could ultimately be forced to sell off some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation fund that could surpass $1 billion. BSA first explored bankruptcy in December 2018.

    “Scouting programs will continue throughout this process and for many years to come,” said Evan Roberts, a spokesman for the Scouts. “Local councils are not filing for bankruptcy because they are legally separate and distinct organizations.”

    The Boy Scouts’ finances have been strained in recent years by declining membership and sex-abuse settlements.

    It may prove difficult to determine how much is available to settle suits.

    Boy Scouts Of America Chapter 11 Bankruptcy Bar Date

    Boy Scouts of America Bankruptcy Explained

    All claims must be filed by November 16, 2020. After this date, a survivor could be denied any sort of recovery from the Boy Scouts of America. This complicated and highly nuanced legal tactic is often confusing to people who are not familiar with this type of bankruptcy, and it can prevent survivors of child sexual abuse from pursuing legal action.

    If you or someone you love was sexually abused as a child while participating in the Boy Scouts of America by a Scout leader, Scoutmaster, or other authority figure please contact us confidentially today. The attorneys and advocates at Jeff Anderson & Associates have handled numerous Boy Scout child sexual abuse cases, as well as multiple Chapter 11 bankruptcy cases involving institutions responsible for child sexual abuse committed by their personnel.

    You May Like: What Is Epiq Bankruptcy Solutions Llc

    Boy Scouts Of America Files For Bankruptcy Amid Wave Of Potential Lawsuits

    Facing a wave of lawsuits over sexual abuse allegations, the Boy Scouts of America filed for bankruptcy Tuesday in an effort to protect the future of the embattled century-old organization.

    The long-anticipated Chapter 11 filing will allow the Boy Scouts to keep operating as it reorganizes its finances and creates a trust to pay hundreds of potential victims. It will also give alleged victims a limited amount of time to come forward before being barred indefinitely from seeking compensation.

    The declaration sets the stage for what could be one of the countrys most complicated bankruptcy cases in history, lawyers say, and raises questions about the possible impact on local Boy Scout councils, which are independently corporated and offer programming to troops across all 50 states and U.S. territories. In the bankruptcy petition, the organization reported $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities.

    The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting, Roger Mosby, the president and chief executive of the Boy Scouts of America, said in a statement released at about 1 a.m. Tuesday, shortly after the filing. While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process with the proposed Trust structure will provide equitable compensation to all victims while maintaining the BSAs important mission.

    Boy Scouts Bankruptcy Plan Set For Vote By Abuse Claimants

    DOVER, Del. More than a year and a half after the Boy Scouts of America sought bankruptcy protection amid an onslaught of child sex abuse allegations, tens of thousands of men who say they were molested as children by scoutmasters and others will soon get a chance to vote on a BSA reorganization plan.

    The Boy Scouts, based in Irving, Texas, sought bankruptcy protection in February 2020, seeking to halt hundreds of individual lawsuits and create a fund for men who say they were sexually abused as children. Although the organization was facing 275 lawsuits at the time, its now facing more than 82,000 sexual abuse claims in the bankruptcy case.

    Despite the plan being sent out to abuse claimants for a vote, there are several issues involving Boy Scouts insurers and local troop sponsoring organizations that remain unresolved.

    Here is a look at where the case stands:

    DISCLOSURE STATEMENT

    Following a hearing that stretched over two weeks, a judge on Thursday approved a revised disclosure statement that outlines and explains the Boy Scouts reorganization plan.

    Approval of the disclosure statement was required before the Boy Scouts could begin sending out ballots to abuse claimants and other creditors to vote on the plan.

    THE PLAN

    Attorneys for the Boy Scouts and abuse claimants say they still hope to reach settlements with other insurers and sponsoring organizations, but its unclear whether they will be successful.

    COMPETING RECOMMENDATIONS

    TALLYING THE VOTE

    CASE TIMELINE

    Read Also: What Is Epiq Bankruptcy Solutions Llc

    The Once Iconic American Institution Filed For Bankruptcy Following Years Of Declining Membership And Catastrophic Scandal

    For the most part, I liked being a Boy Scout. I learned how to go backpacking, to identify which snakes were dangerous and which ones were not, to tie a bowline knot behind my back, and how to build a roaring fire. I climbed a tall mountain at the Scouts Philmont Ranch in New Mexico with my troop, I canoed across the Adirondacks, and I also smoked weed for the first time on a Boy Scout rock climbing trip . When I was required to organize a labor-intensive service project, I got a couple dozen friends to help me get rid of some disastrously overgrown yew bushes by the middle school at the end of my street. When I became an Eagle Scout in 2010, like my dad did 30 years earlier, it felt like it meant something.

    When I was just starting out, at about 11 years old, I especially liked reading Boys Life magazine, skipping ahead to the Scouts in Action section a recurring chronicle of Boy Scouts around my age who had used their scouting skills in moments of crisis, like a car crash or a forest fire. Although I never had such a moment of bravery, the things I learned in scouting made it seem like a credible fantasy. I felt this even more strongly because I lived in suburban New Jersey, and without Boy Scouts, I probably wouldnt have gone camping more than once or twice in my life. Now, however, I am prepared, and to this day, I still keep a plastic arrowhead from Philmont on my keyring.

    Did They Try To Reach A Settlement To Avoid Bankruptcy

    Boy Scouts Of America File For Chapter 11 Bankruptcy

    Yes. The Boy Scouts negotiated with victims’ attorneys in November but did not reach a settlement.

    “It became apparent that attorneys for abuse victims believed certain Local Councils with significant abuse liabilities have significant assets that could also be used to compensate victims,” the Boy Scouts said in a court filing.

    Also Check: How Many Bankruptcies Has Donald Trump Filed

    Boy Scouts Of America File For Chapter 11 Bankruptcy

    On February 17, 2020, the Boy Scouts of America announced its filing Chapter 11 Bankruptcy. On May 26, 2020 the bankruptcy court set a claims bar date marking the deadline by which all survivors of child sexual abuse by a BSA volunteer or employee must formally file a claim with the court: After this date, a survivor could be denied any sort of recovery from the Boy Scouts of America.

    This complicated and highly nuanced legal tactic is often confusing to people who are not familiar with this type of bankruptcy, and it can prevent survivors of child sexual abuse from pursuing legal action. As demonstrated over the years by Catholic dioceses facing similar circumstances, this option stands to benefit the organization far more than adult survivors who were hurt as children by perpetrators employed by or affiliated with the organization. What is most important for survivors to understand about this process is that they still have rights, but the time to take legal action is limited.

    Boy Scouts’ Bankruptcy Creates Rift With Religious Partners

    NEW YORK Amid the Boy Scouts of Americas complex bankruptcy case, there is worsening friction between the BSA and the major religious groups that help it run thousands of scout units. At issue: the churches fears that an eventual settlement while protecting the BSA from future sex-abuse lawsuits could leave many churches unprotected.

    The Boy Scouts sought bankruptcy protection in February 2020 in an effort to halt individual lawsuits and create a huge compensation fund for thousands of men who say they were molested as youngsters by scoutmasters or other leaders. At the time, the national organization estimated it might face 5,000 cases it now faces 82,500.

    In July, the BSA proposed an $850 million deal that would bar further lawsuits against it and its local councils. The deal did not cover the more than 40,000 organizations that have charters with the BSA to sponsor scout units, including many churches from major religious denominations that are now questioning their future involvement in scouting.

    The United Methodist Church which says up to 5,000 of its U.S. congregations could be affected by future lawsuits recently advised those churches not to extend their charters with the BSA beyond the end of this year. The UMC said these congregations were disappointed and very concerned that they werent included in the July deal.

    Negotiators face a challenging situation.

    Recommended Reading: Has Trump Filed Bankruptcy

    Boy Scouts Of America May File For Bankruptcy Following Lawsuits Over Sexual Abuse Allegations

    Amid falling membership and the rising costs of battling lawsuits, the Boy Scouts of America is reportedly weighing filing for bankruptcy.

    The decades-old youth organization has hired a law firm to look into Chapter 11 bankruptcy filing, according to the Wall Street Journal.

    The group plans to explore all options available to ensure that the local and national programming of the Boy Scouts of America continues uninterrupted, according to a letter sent to its employees Wednesday and acquired by the Journal.

    Since its peak in the 1970s, the Boy Scouts has seen massive drops in membership, including 610,000 in the last two years after the Mormon Church yanked its scouts from the ranks.

    But the larger issue is the influx of lawsuits related to sexual assault allegations, with dozens filed stemming from hundreds of claims of abuse in the 70s and 80s.

    Legal fees have also gone to fight a lawsuit from the Girl Scouts, who sued the Boy Scouts in November after the group tried to expand recruitment to girls and transgender scouts.

    What Does Chapter 11 Bankruptcy Mean For The Boy Scouts Of America

    Boy Scouts bankruptcy is good news for victims, the ...

    Simply put, Chapter 11 bankruptcy protection allows the Boy Scouts of America to keep doing business as usual while actively settling its debts the debts here being BSAs responsibility for sexual abuse claims by Scouts and former Scouts. There are two major factors that make this possible which should be on the radar of anyone considering filing a sexual abuse claim against the Boy Scouts of America: a claims bar date and financial reorganization.

    Claims Bar Date: An important part of this process provides that the court set a claims bar date, which is a date marking the deadline by which all survivors must formally file a claim with the court. In this case, the claims bar date is November 16, 2020. After this date, a survivor could be denied any sort of recovery from the Boy Scouts of America. This helps the Boy Scouts of America limit the number of claims that can be submitted and makes filing in the future more difficult. In a way, this is a lot like the organization hitting the Reset button giving it a fresh start and leaving survivors yet-to-submit-a-claim left with the burdens of the past and limited means for relief.

    Read Also: Can Restitution Be Discharged In Bankruptcy

    Do The Boy Scouts Have A History Of Covering Up Sexual Abuse

    Yes. Hundreds of sex abuse cases have been brought against the Boy Scouts over the last several decades, and courts havefoundevidence of the organizations leadership attempting to cover up these complaints or firing the alleged assailants but not reporting the criminal acts to the police.

    In 2010, an Oregon jury handed down a guilty verdict to the Boy Scouts in a sex abuse case. A court ordered that the organization pay $18.5 million to the victim and make public an internal list of men who had been accused of preying on boys, known within the Scouts as thePerversion Files. The Los Angeles Times the list in 2012. In the 2010s, so many claims of abuse were filed against the Boy Scouts that the organization began to collapse under the debt of all the money owed to boys and men whom variouscourts found had been wronged by the organization or settledout ofcourt.

    Since then, tens of thousands of men have added their claims to the suit.

    Helping Survivors Of Child Sexual Abuse In Scouting Navigate Chapter 11 Bankruptcy

    If you were sexually abused by a Scout Leader, Scout Master or other volunteer of the Boy Scouts of America, understanding your rights and options now that the Boy Scouts of America has filed for Chapter 11 bankruptcy protection is crucial to finding the most direct path to accountability, healing and justice. We have compiled the following information as a basic introduction to Chapter 11 bankruptcy in the context of the Boy Scouts. We urge all survivors of sexual abuse in Scouting to consult legal counsel before pursuing legal action.

    You May Like: What Is Epiq Bankruptcy Solutions Llc

    Its Not Just Financial Bankruptcy

    The old American Boy Scouts might as well be filing for moral bankruptcy, having lost both its base and elite cultural capital. What used to be an organization designed to help boys become men has now been re-fashioned in line with the new gnosticism of American culture, accepting LGTBQIA ideology, while abandoning its traditional ascetic position about sex and its opposition to atheism.

    Next years World Scouting Jamboree in West Virginia reportedly will be the first hosted by the former Boy Scouts of America to make condoms available to participants. A 2016 agreement with the Unitarian-Universalists overrode the groups membership requirement of belief in God by allowing belief in humanism, contrary to the Scout Oath.

    The bowling alone syndrome of declining civic groups in the United States, over-scheduling of young people, and the weakening of American family models all played a role. In fact, political scientist Paul Kengor of Grove City College has detailed the history of American communists and cultural Marxistss efforts to target and subvert Scouting in particular, to help undermine American family life.

    The central issue was not admitting openly LGBTQIA-identifying members and leaders, but redefining the groups value of freedom as self-expression, rather than self-restraint. The latter was the traditional ethos of Scouting, not shaping boys into open heterosexuals or any other type of -sexuals, in the Mad Men/Hugh Hefner mold or anything else.

    RELATED ARTICLES

    Popular Articles