Barraged by hundreds of sex-abuse lawsuits, the Boy Scouts of America (BSA) yesterday filed for bankruptcy protection in hopes of working out a potentially mammoth victim compensation plan that would allow the hallowed, 110-year-old organization to carry on.
The Chapter 11 filing in federal bankruptcy court in Wilmington, Delaware, sets in motion what could be one of the biggest, most complex bankruptcies ever seen. Scores of lawyers are seeking settlements on behalf of several thousand men who say they were molested as scouts by scoutmasters or other leaders decades ago, but are only now eligible to sue because of recent changes in their states’ statute-of-limitations laws.
By going to bankruptcy court, the Scouts can put those lawsuits on hold for now, but ultimately they could be forced to sell off some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation trust fund that could surpass US$1 billion.
Photo: AFP
The bankruptcy petition listed the Boy Scouts’ assets as between US$1 billion and US$10 billion, and its liabilities at US$500 million to US$1 billion.
“Scouting programs will continue throughout this process and for many years to come,” the Boy Scouts said in a statement. “Local councils are not filing for bankruptcy, because they are legally separate and distinct organizations.”
The bankruptcy represents a painful turn for an organization that has been a pillar of American civic life for generations and a training ground for future leaders. Achieving the rank of Eagle Scout has long been a proud accomplishment that politicians, business leaders, astronauts and others put on their resumes and in their official biographies.
The Boy Scouts’ finances have been strained in the past few years by declining membership and sex-abuse settlements.
The number of youths taking part in scouting has dropped below 2 million, down from more than 4 million in peak years of the 1970s.
Most of the newly surfacing cases date to the 1960s, 1970s and 1980s; the organization has said there were only five known abuse victims in 2018. The Boy Scouts credit the change to an array of prevention policies adopted since the mid-1980s, including mandatory criminal background checks and abuse-prevention training for all staff and volunteers, and a rule that two or more adult leaders be present during all activities.
“We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” BSA president and CEO Roger Mosby said. “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process, with the proposed trust structure, will provide equitable compensation to all victims while maintaining the BSA’s important mission.”
The BSA said it is encouraging all victims to come forward to file a claim in the case.
A deadline for filing claims has not yet been set by the bankruptcy court, but the BSA said that would likely happen later this year.
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