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

4 minute read

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

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(Reuters) - Lawyers representing men who brought sex abuse claims in the Boy Scouts of America bankruptcy argued on Tuesday for more information about the specific liabilities that local councils within the organization face with respect to abuse claims.

Abuse claimants say they need details about the individual councils’ potential liabilities, which would be released under the Boy Scouts’ proposed reorganization plan, before they vote on it to understand the claims and potential compensation they would be giving up.

Those concerns were raised during a virtual hearing Tuesday before U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware on whether the youth organization’s disclosure statement, which outlines the key elements of the proposal for those who are entitled to vote, contains sufficient information before the plan can be sent to the abuse claimants for the vote.

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“I think these are real questions and I think we should be able to ask the Boy Scouts or local councils to include why they’re contributing and what they’re contributing,” Irwin Zalkin of The Zalkin Law Firm, who represents 150 abuse claimants, said during the hearing.

BSA, represented by White & Case, is working to obtain approval of its plan that would set up a trust to compensate survivors of sexual abuse by troop leaders. Under the plan, the national organization and 250 local councils agreed to contribute $850 million to settle abuse claims. The deal has the support of the Coalition of Abused Scouts for Justice, which is comprised of 27 law firms that represent around 65,000 abuse claimants.

The Boy Scouts have disclosed how much each local council has agreed to pay, but Zalkin said his clients want to know the value of the claims local councils are facing that they would be releasing by voting in favor of the plan.

The Boy Scouts say the disclosures about the local councils are sufficient and that valuations of claims against each local council would not produce “reliable” estimates.

The dispute was put on the back burner after a lawyer for the official tort claimants’ committee, James Stang of Pachulski Stang Ziehl & Jones, offered to share information his team has put together surrounding certain claim valuations and how much is being contributed by local councils compared with their available assets.

Silverstein encouraged Stang to do so and said if disputes over the claim valuations remain, she would handle the issue.

“But nobody is ever going to be satisfied with a disclosure statement,” she warned. “That’s just not the way it works.”

Additional disclosure issues raised during Tuesday’s hearing focused on the Boy Scouts’ insurance coverage and contributions from chartered organizations that fund Scouting units and activities. The hearing will continue on Wednesday.

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 trust, bringing the total amount available to pay survivors to $1.887 billion. Proponents of the plan say that amount will increase.

Approximately 82,500 abuse claims have been filed in the case. Payouts will depend on the severity of the abuse, among other factors.

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 abuse settlements are still too low, victims groups say

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

U.S. judge signs off on $850 million Boy Scouts sex abuse settlement

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Reporting by Maria Chutchian

Our Standards: The Thomson Reuters Trust Principles.

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