Trial set to consider approval of Boy Scouts bankruptcy plan
DOVER, Del. (AP) — More than two years after the Boy Scouts of America filed for bankruptcy protection amid a spate of child sex abuse allegations, a judge will determine whether to confirm its proposed reorganization plan in a trial beginning Monday.
The trial in U.S. bankruptcy court in Delaware is expected to drag on for several weeks as attorneys and witnesses battle a host of complex issues, including insurance rights, liability waivers, the value of some $80 000 child sexual abuse claims and how so many of the claims had just been filed.
The Boy Scouts, based in Irving, Texas, filed for bankruptcy protection in February 2020 in a bid to end hundreds of individual lawsuits and create a fund for men who say they were sexually abused as children. involved in scouting. Although the organization faced 275 lawsuits at the time, it was the subject of more than 82,000 sexual abuse claims in the bankruptcy case.
The reorganization plan calls for the Boy Scouts and its approximately 250 local councils to contribute up to $786 million in cash and property and to allocate certain insurance rights to a fund for abuse claimants. In return, the BSA and the councils would be released from any further liability.
The BSA’s two largest insurers, Century Indemnity Co. and The Hartford, would contribute $800 million and $787 million respectively to the indemnity fund. Other insurers have agreed to pay about $69 million. The organization’s former biggest troop sponsor, The Church of Jesus Christ of Latter-day Saints, commonly known as the Mormon Church, has agreed to contribute $250 million for abuse claims involving the church . Congregations affiliated with The United Methodist Church agreed to contribute $30 million.
Troop sponsoring organizations and settlement insurers would also be relieved of any further liability in return for their contributions.
In total, the compensation fund would total more than $2.6 billion, which would be the largest comprehensive sexual abuse settlement in US history. The average recovery per plaintiff, however, would be significantly lower than other sexual abuse scandal settlements involving large numbers of victims. The University of Southern California, for example, last year agreed to an $852 million settlement with more than 700 women who accused a longtime campus gynecologist of sexual abuse.
The BSA plan faces objections from several opponents, including the bankruptcy trustee, who acts as a watchdog in such cases to ensure compliance with the US bankruptcy code.
Opponents argue, among other things, that the proposed liability releases for non-debtor third parties — including local BSA councils, insurers and troop-sponsoring organizations — violate the due process rights of abuse plaintiffs. and are not permitted under the bankruptcy code.
Several insurers who have not settled are maintaining procedures for distributing funds to abusive claimants are violating insurers’ rights under policies they have issued and would allow payment of claims that would not win damages in civil lawsuits. .
The lawsuit comes just over a month after the Boy Scouts announced a settlement with the official abuse plaintiffs committee in the case. The committee was appointed by the US Bankruptcy Trustee to represent the best interests of all sexual abuse survivors.
The official committee has long argued that the BSA’s plan to compensate victims of abuse was “grossly unfair”, but said last month that it had won major concessions during lengthy negotiations with the BSA and other parts.
The revised plan, for example, gives abuse plaintiffs the ability to sue insurance companies and local troop-sponsoring organizations, such as churches and civic groups, that don’t reach settlements within a year. following the entry into force of the reorganization plan. It also includes enhanced child protection measures for Boy Scouts in the future and provisions to ensure independent governance of the compensation fund.
A previous version of the BSA plan garnered support from around 73.5% of the 53,596 claimants who voted. The judge allowed a second ballot, which ended last Monday, so that the plaintiffs could consider changes to the plan. These results showed that 56,536 claimants submitted ballots, 85.7% of whom voted to accept the plan.
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