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Transactional

Boy Scouts abuse claimants seek details of local council, insurer payments

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The Boy Scouts of America signage is pictured at its headquarters in Irving, Texas. REUTERS/Tim Sharp

(Reuters) - Small groups of former Boy Scouts who say they were sexually abused by Scouting leaders are seeking more information about how much money local councils and insurers will be contributing to settle decades worth of sex abuse claims as part of the Boy Scouts of America’s reorganization.

The former Scouts filed a series of objections on Wednesday and Thursday in Delaware bankruptcy court to the organization's disclosure materials for its proposed reorganization plan. It includes a proposed settlement of more than 80,000 sex abuse claims filed against the Boy Scouts.

U.S. Bankruptcy Judge Laurie Selber Silverstein will consider the disclosure materials at a hearing on May 19. If she approves them, the Boy Scouts will be able to send them to creditors who are entitled to vote on the proposed plan. The plan would set up a trust to be funded by a mix of cash, artwork, insurance policies, and at least $425 million from local councils in exchange for releases against legal actions stemming from sex abuse allegations.

Representatives for the Boy Scouts did not immediately respond to a request for comment on the objections.

The organization’s proposal has already been met with opposition from groups representing the interests of abuse survivors in the bankruptcy, including an official tort claimants' committee and a group called the Coalition of Abused Scouts for Justice. This week, law firms representing small groups of individual abuse claimants filed papers saying the disclosure materials need to include valuations of each local council’s assets, how many sex abuse claims have been lodged against each local council, and how much each council is contributing to the settlement trust in exchange for a release of abuse claims. The claimant groups say the information is necessary for them to determine whether the contributions are worth giving up their claims against their local councils.

They also called the organization’s pledge to obtain a $425 million contribution from the local councils “illusory” because no firm agreement with the councils has been made.

“In this regard, the plan is speculative at best and the disclosure statement does nothing to inform abuse survivors whether and when any contribution by the local councils might be realized,” claimants represented by the law firm Anderson & Cummings said in their objection.

The claimants said the disclosure statement needs more detailed explanations of how claims will be valued and whether they will be able to contest the value that is assigned their claims. Additionally, the claimants said the disclosure materials fail to adequately outline insurers’ contributions, how insurance policies will be used and any risks that the insurers won’t provide coverage.

The Boy Scouts recently reached a settlement with one insurer, an affiliate of Hartford Financial Services Group, which has agreed to put $650 million toward the trust. A group representing survivors has called the deal insufficient.

More than 100 letters from former Scouts were also filed in the bankruptcy case this week, sharing personal accounts of abuse and calling for the organization to be held accountable. The letters, addressed to Silverstein, were either filed under seal or partially redacted to protect the writers’ identities.

The Boy Scouts said in April that it will consider a back-up reorganization strategy if it is unable to bring in enough support for the current proposal. The back-up plan would likely exclude the local councils’ contribution and leave them to face lawsuits from former Scouts on their own.

The case is In re Boy Scouts of America, U.S. Bankruptcy Court, District of Delaware, No. 20-10343.

For the Boy Scouts: Jessica Lauria, Michael Andolina, Matthew Linder and Laura Baccash of White & Case; and Derek Abbott and Andrew Remming of Morris, Nichols, Arsht & Tunnell

Our Standards: The Thomson Reuters Trust Principles.

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