Boy Scouts nears court approval of $2.3 billion bankruptcy settlement

Scout statue at the Boy Scouts of America headquarters in Irving
The statue of a scout stands in the entrance to Boy Scouts of America headquarters in Irving, Texas. REUTERS/Tim Sharp
  • Judge overruled objections by insurers, abuse claimants
  • Boy Scouts attorney said final changes could be complete in less than a week

(Reuters) - The Boy Scouts of America is nearing final approval of a reorganization plan that would allow the youth organization to set up a $2.3 billion trust to settle decades’ worth of claims by more than 80,000 men who say they were abused as children by troop leaders.

U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, at a Thursday court hearing overruled remaining objections to the Boy Scouts' Chapter 11 plan. She stopped short of approving it, however, instead asking for further revisions that the organization said could be completed relatively quickly.

Boy Scouts' attorney Jessica Lauria acknowledged in court that it had some "work to do," but said that the remaining changes could be completed in less than a week.

The Boy Scouts had sought confirmation of a modified Chapter 11 plan that aimed to address Silverstein's July 29 ruling rejecting some parts of the plan. The biggest change was the removal of a $250 million settlement between the Boy Scouts and the Church of Jesus Christ of Latter-day Saints, which Silverstein refused to approve because it went too far in protecting the Mormon church from abuse claims that were only loosely connected to scouting activities.

Silverstein overruled the remaining objections to the plan from insurers and sexual abuse claimants who argued that recent revisions went beyond the scope of Silverstein's July opinion. The insurers, for example, objected to a new assertion that the bankruptcy court's estimation of the value of abuse claims did not act as a limit on insurers' eventual liability for those claims.

The objecting abuse claimants and insurers said they may appeal if Silverstein confirms the Boy Scouts' bankruptcy plan.

Despite the objections from those groups, the Boy Scouts' bankruptcy plan has the support of the organization's two primary insurers and 86% of abuse victims who voted on it.

The Boy Scouts filed for bankruptcy in February 2020 after being hit by a flood of sexual abuse lawsuits when several U.S. states passed laws allowing accusers to sue over allegations dating back decades.

Silverstein scheduled a status conference for September 7 but said that hearing may not be necessary if the youth organization completes the revisions before then.

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

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

For the objecting insurers: James Hallowell of Gibson Dunn & Crutcher and David Christian of David Christian Attorneys

Read more:

U.S. judge rejects parts of Boy Scouts' $2.7 billion sex abuse deal

Boy Scouts secure more survivor support ahead of final battle over sex abuse deal

Boy Scouts wrap up month-long trial over $2.7 bln sex abuse deal

Our Standards: The Thomson Reuters Trust Principles.