Victims agree to extend temporary halt on Boy Scout lawsuits

The committee representing child sex abuse survivors in the Boy Scouts of America bankruptcy case has agreed to the extension of an injunction halting lawsuits against local Boy Scouts councils

Via AP news wire
Tuesday 09 March 2021 23:37
Boy Scouts Bankruptcy
Boy Scouts Bankruptcy

The committee representing child sex abuse survivors in the Boy Scouts of America bankruptcy case has agreed to the extension of an injunction halting lawsuits against local Boy Scouts councils and sponsoring organizations.

In return for the extension, the BSA and local councils must provide the committee with information about local troop rosters that can help victims validate their claims, according to a court filing submitted Monday.

Attorneys for one of the BSA’s insurers argued in a court filing Tuesday that the BSA is legally entitled to the injunction, and that the court should not grant any of the conditions it contains. The insurers argue that the arrangement regarding roster information would potentially reveal private information without the consent of local councils and sponsoring organizations.

The current injunction expires March 19. A hearing on the proposed extension is scheduled for March 17.

BSA attorneys filed a motion last month asking the judge to extend the injunction after the committee refused to give its consent, despite having done so several times in the past. The committee has been frustrated with the response by local councils to requests for information on their financial assets. It has also formally challenged BSA’s contention that roughly two-thirds of its listed $1 billion in assets are “restricted assets” unavailable for creditors.

On Monday, however, attorneys submitted a court filing indicating that the BSA, the committee and the committee of unsecured creditors have agreed to extend the injunction through July 19, the date sought by the Boy Scouts.

Attorneys for the BSA have said the injunction is critical to restructuring efforts and that allowing lawsuits to proceed against local councils and sponsoring organizations would make it difficult, if not impossible, for the BSA to both equitably compensate abuse survivors and ensure that the organization can continue to operate.

The Boy Scouts of America, based in Irving Texas sought bankruptcy protection last February in an effort to halt hundreds of lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.

Attorneys for abuse victims made it clear from the onset of the bankruptcy that they would go after campsites and other properties and assets owned by local councils to contribute to a settlement fund.

The roughly 250 local councils, which run day-to-day operations for local troops, are not debtors in the bankruptcy and are considered by the Boy Scouts to be legally separate entities, even though they share insurance policies and are considered “related parties” in the bankruptcy case.

More than 95,000 sexual abuse claims have been filed in the bankruptcy case, although attorneys have said about 10,000 of those claims are duplicates.

Before the bankruptcy filing, the BSA had been named in about 275 lawsuits and told insurers it was aware of another 1,400 claims. The number of lawsuits has more than tripled in the past year to 870 in more than 110 state and federal courts.

As a condition for continued protection from litigation, the BSA and local councils agreed to make “reasonable and diligent” efforts to preserve historical troop and camp rosters that name Boy Scouts, adult volunteers and sponsoring organizations. The BSA must provide each local council with a list of sex abuse claims identifying that council or its predecessor. Each council must then search its rosters and provide any that identify survivors.

The BSA will then have 60 days to turn over those rosters to attorneys for the committee, BSA insurers, a plaintiffs group called the Coalition of Abused Scouts for Justice, and an attorney appointed to represent potential future abuse claimants who were not able to submit claims by the November deadline.

The agreement to extend the injunction also prohibits any local council from selling or transferring any property with the intent to hinder or defraud creditors, or without receiving compensation that equals the property's value.

The agreement also prohibits local councils from designating unrestricted assets as restricted “by board resolution or otherwise,” including proceeds from the sale of assets.

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