More changes to Boy Scouts of America bankruptcy plan
Boy Scouts of America attorneys have submitted yet another revised reorganization plan as they continue to work toward a goal of emerging from bankruptcy this fall
DOVER, Del. – Latest Boy Scouts of America Bankruptcy Plan Boosts BSA and Local Councils’ Contributions to Child Sex Abuse Trust Fund Project While Appearing to Back Down from Settlement controversial with one of the insurers of BSA.
As part of a revised plan submitted late last week, the Boy Scouts are proposing to issue an $ 80 million unsecured promissory note to a trust fund for victims of abuse. The BSA is also proposing to use restricted assets to help cover post-bankruptcy operational expenses, which would represent up to $ 50 million in unallocated cash available to survivors of abuse. With the changes, BSA’s proposed contribution to the trust fund would increase from around $ 120 million under a previous plan to around $ 250 million.
The BSA also said its local councils would contribute $ 500 million to the fund for victims of abuse, up from the $ 425 million offered in the previous plan. The new proposal asks councils to contribute $ 300 million in cash and the remainder in property with a combined estimated value of $ 200 million.
The BSA, its some 250 local councils and hundreds of sponsoring organizations such as churches and civic groups would be released from any additional liability in exchange for contributions to the trust fund and the transfer of insurance rights.
In a prepared statement, the Boy Scouts described the revised plan as “an important step” towards global resolution of abuse complaints.
“The BSA hopes that this plan, or a plan very similar to it, will have the support of a qualified majority of survivors,” the organization said.
A hearing on the latest proposal is scheduled for July 20.
Meanwhile, the Boy Scouts appear to be pulling back from a previously announced settlement in which one of the group’s insurers, The Hartford, agreed to pay the Victims Trust $ 650 million in exchange for being released from all charges. another obligation under policies dating from 1971. The agreement allows The Hartford to pay a lower amount if the BSA or the settlement trust enters into an agreement with another major BSA insurer, Century Insurance Group, and the settlement amount of Century is less than twice that of The Hartford, at $ 1.3 billion.
The Hartford settlement has come under heavy criticism from abuse attorneys, who estimate the insurer’s liability exposure to billions of dollars.
“We see Hartford’s abandonment as a positive development,” Jim Stang, lawyer for the official committee representing victims of abuse, said on Monday.
The BSA admitted in court filing last week that it cannot garner support for a comprehensive resolution of the sexual abuse complaints that have led the organization to bankruptcy if the Hartford settlement is included in its plan . Lawyers representing the official committee, a group of plaintiffs called the Coalition of Abused Scouts for Justice, and potential future abuse claimants told BSA lawyers in a letter two weeks ago that survivors of abuse do not would support, “under no circumstances”, a plan that includes the Hartford Settlement.
“It appears that the overall resolution plan cannot be confirmed as it includes the Hartford Insurance Settlement Agreement, unless changes are made (…)
Lawyers for the Boy Scouts have indicated they will ask the bankruptcy judge at next month’s hearing whether they are forced to pursue the settlement with The Hartford, which requires court approval, given the opposition universal victims of abuse. Otherwise, lawyers for BSA intend to withdraw the settlement from the plan.
The Boy Scouts of America, based in Irving, Texas, filed for bankruptcy protection in February 2020, set to end hundreds of lawsuits and create a compensation fund for men who were abused as children by Scout leaders or other leaders.
Lawyers for victims of abuse said they would deal with property and assets owned by local BSA councils. The councils, which manage the day-to-day operations of the local troops, are considered legally separate entities by the Boy Scouts, even though they share insurance policies and are considered “related parties” to the bankruptcy.
Lawyers for the Boy Scouts said between $ 2.4 billion and $ 7.1 billion, including insurance fees, may be available to victims of abuse. The official Victims Committee, known as the Tort Plaintiffs Committee and charged with acting as a trustee for all victims of abuse, estimates the value of some 82,500 sexual abuse complaints at around $ 103 billion.