Boy Scouts bankruptcy case: Judge set to begin key hearing

Boy Scouts bankruptcy case: Judge set to begin key hearing

August 12, 2021

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Attorneys for the Boy Scouts of America are asking a Delaware judge to approve an $850 million agreement that is the foundation of the group's plan to emerge from bankruptcy.

The judge was to begin a hearing Thursday on whether to approve the agreement, which involves the national Boy Scouts organization, the roughly 250 local Boy Scout councils, and law firms representing some 70,000 men who claim they were molested as youngsters by scoutmasters and others.

The Irving, Texas-based Boy Scouts sought bankruptcy protection in February 2020 amid an onslaught of lawsuits by men who said they were sexually abused as children. The filing was part of an attempt to reach a global resolution of abuse claims and create a compensation fund for victims.

Boy Scouts of various ages march in line in Oxford, Conn.’s Memorial Day Parade in 2012. (iStock / iStock)

The Boy Scouts have proposed contributing up to $250 million in cash and property to a fund for abuse victims. Local councils, which run day-to-day operations for Boy Scout troops, would contribute $600 million. The national organization and councils also would transfer their rights to Boy Scout insurance policies to the victims fund. In return, they would be released from further liability for abuse claims.

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The agreement is opposed by insurers that issued policies to the Boy Scouts and local councils, other law firms representing thousands of abuse victims, and various church denominations that have sponsored local Boy Scout troops.

As part of the agreement, the Boy Scouts are seeking permission from the judge to back out of a settlement reached in April with one of their insurers, The Hartford. The Hartford agreed to pay $650 million into the victims fund in exchange for being released from any further obligations, but victims attorneys have said their clients won't support a reorganization plan that includes it.

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