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Boy Scouts of America File for Bankruptcy Amid Sexual Abuse Claims

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The Boy Scouts of America (BSA) is something of an American institution. Although its members’ motto is be prepared, BSA was decidedly not prepared for the legal backlash it is currently facing as a result of allegations of sexual abuse. After playing an important role in boys’ lives across our nation, Boy Scouts of America is facing cascading sexual abuse lawsuits and has filed for bankruptcy protection in response – in anticipation of what will almost certainly be massive compensation awards for victims.

Boy Scouts Of America Filing Bankruptcy

Changes in laws related to the statute of limitations in New York, Arizona, New Jersey, and California have opened a long-shut legal window that allows victims of bygone abuse to file claims (known as lookback window laws). Because the statute of limitations had run its full course for most claimants, they would not have otherwise been permitted to file these claims. To date, several thousand men have come forward with accusations.

In bankruptcy court, a wide range of issues will be addressed, including:

  • The fate of the scouting organization’s assets
  • To what extent the organization’s insurance will cover victim compensation
  • Whether the assets of the more than 260 local Boy Scout councils will be included in the compensation funding

Declining membership in recent years has weakened the Boy Scouts’ financial standing. While this bankruptcy filing puts some of the financial issues related to the sexual abuse cases on hold, for the time being, the Boy Scouts could be required to liquidate some of its vast holdings to pour into the compensation funding, which could exceed a billion dollars.

It’s important to point out that, by filing for bankruptcy, the Boy Scouts have altered the trajectory of the victims’ cases. The Boy Scouts filed for bankruptcy under Chapter 11, which allows the organization to continue operating and to pay creditors off over time. Rather than having to fight each claimant in court, the bankruptcy filing allows the Boy Scouts to bundle all the lawsuits into one case and to negotiate a settlement. As a result, many victims will not get their day in court – which can be cathartic for victims of sexual abuse – but must now file directly through the bankruptcy court.

The Boy Scouts are not the first well-established institution to face such a fate. In recent years, universities like Michigan State and Penn State, along with Roman Catholic dioceses around the country, have paid hundreds of millions in compensation under similar circumstances.

Sexual Abuse Poisoning a Wholesome Institution

The Boy Scouts have long been viewed as a wholesome organization that enriches boys’ lives in important ways. Making the rank of Eagle Scout is a significant accomplishment that recipients, including high-ranking leaders in business, politics, and beyond, are proud to highlight in their bios. In fact, presidents John Kennedy, Gerald Ford, and Bill Clinton were all Boy Scouts. The national chairman of the Boy Scouts, Jim Turley, expressed his own outrage regarding the perpetrators who committed these abuses and those employees and volunteers who blatantly disregarded procedures and “forgave transgressions that are unforgivable.”

Boy Scouts and a History of Sexual Abuse

One attorney litigating sexual abuse within the Boy Scouts likens the organization’s financial bankruptcy to its moral bankruptcy. In fact, BSA acknowledges that abuse happened within its confines, and relevant records in the organization’s files reveal that about 12,000 boys made accusations while participating in the Scouts (the vast majority in the 1980s and earlier). While those who were identified as abusers were all kicked out of the Boy Scout organization, they weren’t always reported to law enforcement, which is how the Scouts claim they currently handle such allegations.

While a small number of the abuse-related files are now in the public record, most are not and remain secreted away. One attorney in a coalition of firms representing more than 1,800 of those filing sexual abuse charges against the Boy Scouts relays that the vast majority of the relevant clients they are representing have named abusers other than those in the Scouts’ closed files. In other words, the issue could go even deeper than was previously believed.

One attorney involved has voiced his opinion that the Boy Scouts, with the bankruptcy filing, may be attempting to limit the public’s access to the files and – in the process – limit public knowledge about exactly how the organization dealt with (or failed to deal with) the matter.

When Boy Scouts of America was considering bankruptcy in early 2019, a legal advocacy group known as the Abused in Scouting group reached out to potential victims via television ads. Ultimately, they gathered almost 2,000 complainants – with at least one in every state. All told, nearly 8,000 leaders have been implicated in pending accusations.

Boy Scouts Compensating Victims of Sexual Abuse

In an open letter to victims, the national chairman of the Boy Scouts, Jim Turley, states that the organization chose bankruptcy as the best mechanism for ensuring the organization can “equitably compensate all victims of past abuse in our programs, through a proposed victims’ compensation trust.” In other words, BSA maintains that the bankruptcy filing is intended to benefit the victims of sexual abuse. Many accusers and their attorneys, however, see things differently. For purposes of pursuing compensation, the victims – some of whom have carried this emotional burden for decades – are committed to determining exactly what the Scouts’ assets are. The bankruptcy petition itself lists these assets at somewhere between 1 and 10 billion dollars and lists its liabilities at somewhere between $500 million and $1 billion.

Seek The Compassionate Legal Counsel You Need

If you or someone you care about has been sexually abused by the Boy Scouts of America – or by any other organization – the compassionate and experienced sexual abuse attorneys at Andreozzi & Foote, P.C., have extensive experience helping clients like you obtain justice. You are facing a very difficult path forward, but our dedicated legal team is committed to skillfully advocating for compensation that will help you successfully make that journey. We have offices in Arizona, New York, New Jersey, and Pennsylvania, and we’re here for you. To schedule a free consultation, please don’t hesitate to contact or call us at 866-311-8640 today.

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