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Boy Scouts OK'd to poll sex abuse survivors on bankruptcy plan

4 minute read

The Cushman Watt Scout Center, headquarters of the Boy Scouts of America for the Los Angeles Area Council. REUTERS/Fred Prouser

  • Survivor groups have conflicting views on settlement offers
  • Voting deadline is Dec. 14
  • Plan hearing date set for Jan. 24

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(Reuters) - The Boy Scouts of America has received tentative approval to begin soliciting votes for its proposed reorganization plan from creditors and men who have filed sexual abuse claims in the youth organization’s bankruptcy case.

U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware issued an order on Thursday approving the so-called disclosure statement that will be sent to creditors and sex abuse claimants outlining the plan and potential compensation they could receive if it secures enough votes and is eventually approved by the court. Her ruling came after several days of hearings and negotiations over exactly what type of information should be included in the statement and how it should be phrased.

The official committee of tort claimants, which represents abuse victims as a whole in the bankruptcy, said in a statement on Thursday that it remains opposed to the plan.

"With the approval of the disclosure statement, survivors themselves finally will have their voice heard by voting on the plan,” Doug Kennedy, vice chair of the tort committee, said in the statement.

A group called the Coalition of Abused Scouts for Justice, which is comprised of 26 law firms that say they represent approximately 63,00 abuse claimants, accused the tort claimants committee (TCC) of not offering a solution of its own.

"Unlike the Coalition, the TCC has no plan to compensate survivors," the coalition, which is urging claimants to vote in favor of the deal, said in a statement.

The plan rests on a settlement trust that would distribute payments to abuse claimants. The payments would be based on the extent of the abuse and where it occurred, among other factors. There is currently a $1.887 billion pot of money available to compensate abuse claimants. Proponents of the plan say that amount is expected to grow.

The judge has set a Jan. 24 start date for a trial over the plan.

Approximately 82,500 abuse claims have been filed in the case.

Like the tort committee, some lawyers representing other groups of abuse claimants say that insurers, local councils and chartered organizations that fund Scouting activities and units need to contribute more to the settlement pot.

"This plan is a slap in the face to tens of thousands of survivors," Irwin Zalkin, who represents about 150 survivors, said in a statement urging claimants to vote against the plan.

Insurer Hartford Financial Services Group Inc has offered $787 million and the Church of Jesus Christ of Latter-day Saints, which was previously a charter organization, has said it will contribute $250 million to the settlement trust. The Boy Scouts and 250 local councils said they will provide a combined $850 million.

Other insurers, including Century Indemnity Co, have yet to strike a deal with the organization.

The Boy Scouts, represented by White & Case, filed for bankruptcy in February 2020 to resolve hundreds of lawsuits accusing troop leaders of sex abuse spanning decades.

Under the Boy Scouts plan, abuse claimants could receive as little as $3,5000 for abuse that did not involve physical contact to a maximum of $2.7 million for the most severe cases, according to court papers.

The voting solicitation process will take about two months, beginning in October. Claimants have until Dec. 14 to submit their ballots.

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

For Hartford: James Ruggeri and Joshua Weinberg of Shipman & Goodwin; Philip Anker, Danielle Spinelli and Joel Millar of Wilmer Cutler Pickering Hale and Dorr; and Erin Fay and Gregory Flasser of Bayard

For the tort committee: James Stang, Iain Nasatir, John Morris, James O'Neill and John Lucas of Pachulski Stang Ziehl & Jones

For the Coalition of Abused Scouts for Justice: David Molton, Sunni Beville and Eric Goodman of Brown Rudnick; Lawrence Robbins, Ariel Lavinbuk, William Trunk and Joshua Bolian of Robbins, Russell, Englert, Orseck & Untereiner; and Rachel Mersky of Monzack Mersky and Browder

Read more:

Boy Scouts plaintiffs' lawyers call for breakdown of local council abuse claims

Boy Scouts abuse settlements are still too low, victims groups say

Boy Scouts reach $1 bln in sex abuse settlements with The Hartford, Moron Church

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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