Stakes Are High as Boy Scouts Seek Bankruptcy Protection

A recent Associated Press article tried to make some sense of the extremely complicated bankruptcy filing by the Boy Scouts of America.  

The BSA sought bankruptcy protection in February 2020 to halt thousands of lawsuits by men who said they were molested as youngsters by Scoutmasters or other leaders. The filing was part of an attempt to reach a global resolution of abuse claims and create a compensation fund for victims. The Boy Scouts recently announced an $850 million agreement with key constituencies, but not all parties in the case are on board. A judge will hold a hearing starting Thursday to decide whether to approve the agreement, which could result in a new reorganization plan for the Texas-based Boy Scouts.

There are still plenty of issues to be resolved and no guarantee that the 111-year-old organization won’t be forced to liquidate its assets and cease to exist. Here’s a look at where the case stands.

THE AGREEMENT

The $850 million agreement includes the national Boy Scouts organization, the roughly 250 local Boy Scout councils, the official victims committee appointed by the bankruptcy trustee, attorneys separately representing 70,000 of the sex abuse claimants, and lawyers representing victims who might file future claims.

The Boy Scouts have proposed contributing up to $250 million in cash and property to the victims fund. Local councils, which run day-to-day operations for Boy Scout troops, would contribute $600 million. In addition, the national organization and local councils would transfer their rights to Boy Scout insurance policies to the victims fund. In return, they would be released from future liability for abuse claims.

Three key groups are opposed to the tentative agreement: troop sponsors such as churches, schools, and civic organizations; insurance companies that cover the Boy Scouts and local councils; and victims attorneys who are at odds with other law firms representing the majority of abuse claimants.

TIMELINE

If the judge approves the $850 million agreement, she will then hold a hearing starting Aug. 25 to decide whether to approve a disclosure statement that explains and outlines an updated Boy Scouts reorganization plan. Approval of the disclosure statement is required before ballots can be sent to abuse survivors to vote on the plan. The judge will hold a separate hearing in the fall to determine whether to approve the plan itself.

Almost everywhere you look, there’s another legal dispute. And when those annoying things negatively impact you and/or your business including bankruptcies, landlord/tenant matters including unlawful detainers, contract issues, nuisance ADA claims and even collections, call in your good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind!  

More on the case:

https://www.sfgate.com/news/article/EXPLAINER-What-s-at-stake-in-Boys-Scouts-16379804.php