The Boy Scouts of America this week filed a bankruptcy reorganization plan that provides for continued operations of its local troops and national adventure camps, but leaves many unanswered questions about how it will resolve tens of thousands of claims for sexual abuse by former Boy Scouts.
The plan was filed in Delaware Bankruptcy Court on Monday, though the BSA is in intensive negotiations with insurers who are significantly exposed to claims of sexual abuse, and with the official committee representing the victims of abuse.
The plan requires a $ 300 million contribution from the Boy Scouts local councils to a trust for abuse, although the form and timing of these contributions remain in the air. The Boy Scouts also say that unlimited cash in excess of the $ 75 million the organization claims it needs for operations when it comes to bankruptcy goes into the trust fund. The BSA also agreed to contribute its collection of Norman Rockwell paintings to the fund and to build a warehouse facility in North Carolina, a Scouting University facility in Texas, and rights to oil and gas interests on properties in 17 states. sell.
“The plan shows that significant progress has been made as we continue to work with all parties to achieve our strategy of compensating victims fairly and addressing our other financial obligations so that we can serve the youth for years to come,” he said. the boy said. Scouts said in a prepared statement.
“In the coming months, additions to the plan will include a more detailed outline of the process to compensate survivors and more details on how local councils will support this effort,” the statement added.
Paul Mones, a lawyer representing hundreds of former scouts, called the plan “sad and tragically inadequate”.
“The problem is that the Boy Scouts are not willing to dig deep enough for the deep pain they caused,” he said.
“They are shifting the responsibility to the insurance companies and creating a situation for the survivors to obviously take lengthy litigation to get the fair compensation they deserve,” Mones added. “The BSA basically wants to get away with it.”
The Boy Scouts of America, based in Irving, Texas, last February filed for bankruptcy protection to stop hundreds of individual lawsuits and create a compensation fund for men who were molested as scouts by young people or other leaders decades ago.
The councils, which carry out the day-to-day operations for local troops, are not listed as debtors in the bankruptcy and are considered by the Boy Scouts as legally separate entities, although they share insurance policies and are considered ‘related parties’. the bankruptcy case.
Advocates for victims of abuse made it clear at the start of the bankruptcy that they would be contributing to campsites and other properties and assets owned by councils to contribute to a settlement fund.
“I think the Boy Scouts have a responsibility here to make sure the men are taken care of,” Mones said.
The plan does not reflect any agreements with BSA insurers or estimates of their potential obligations, but rather that the rights to policies and insurance returns would fall into the trust.
Lawyers from the BSA’s insurance companies argued that they should be allowed to submit document requests to 1,400 people who have filed sexual abuse claims and to question many of them under oath to determine if there was widespread fraud in the claim process. The judge has yet to rule on the request.
Tancred Schiavoni, a lawyer for one of the BSA insurers, Century Indemnity, said Monday that his client supports a fair solution for victims of abuse, “but this plan does not bring us there.”
“The court must first implement a process to eradicate the bad claims generated by profiteers and misleading advertising campaigns,” Schiavoni said in a prepared statement.
More than 95,000 claims of sexual abuse have been filed in the bankruptcy case.
Before the bankruptcy was filed, the BSA was named in about 275 lawsuits and insurers were told it was aware of another 1,400 claims. The number of lawsuits has more than tripled in the past year to about 860 cases in more than 110 state and federal courts. About 600 of the court cases were filed after the Boy Scouts asked the bankruptcy judge for a preliminary injunction to stop lawsuits against local councils and bail organizations.
Lawyers for the Boy Scouts continue to resolve disputes with the official Committee on Harmful Claims over the amount of BSA and local council assets that may be available to victims of abuse.
The committee complained about the lack of co-operation by local councils in response to its requests for information on their financial assets. In January, the committee also filed a conflicting lawsuit in the bankruptcy case, arguing with BSA that two-thirds of its $ 1 billion, more than $ 667 million, of listed assets are “limited” and unavailable to creditors.
More than half of the alleged limited assets, $ 345.4 million, consist of a letter received from Arrow WV, a non-profit organization founded by the BSA in 2009 and the Summit Bechtel Reserve in West Virginia owned, home of the National Scout Jamboree. The BSA hires the summit of Arrow WV and provides the necessary services for its operation. Other alleged limited assets include three High Adventure facilities worth more than $ 63 million. They are the Philmont Scout Ranch in New Mexico, the Northern Tier in Minnesota and the Florida Sea Base.
The Compensation Claims Committee argues that there is no restriction on the Arrow WV note, and that there are no specific deed restrictions or donor restrictions regarding the sale of the High Adventure facilities and the use of the proceeds to pay creditors, do not prevent.
Meanwhile, a panel of mediators appointed by the court filed a court case Monday night suggesting the Boy Scouts have reached settlements with the official committee of unsecured creditors and with JPMorgan Chase, the organization’s senior security lender.
The BSA has agreed to set aside $ 25 million to pay general unsecured claims that are not abused. JPMorgan, which owns permitted claims of more than $ 328 million, has agreed to extend the term of its debt to ten years after the bankruptcy plan’s effective date. It also agreed to waive the principal and interest payments until two years after the effective date.
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