Boy Scouts win over key abuse-survivors group on bankruptcy plan
Lawyers of the official committee, representing 82,200 individual claimants, will now recommend they accept the youth group’s offer
The Boy Scouts of America won backing for a landmark sex-abuse compensation plan from the official committee representing 82,200 individual claimants, further solidifying support for ending the largest bankruptcy case ever filed over childhood abuse.
The proposed deal with the survivors’ committee, among the harshest critics of the Boy Scouts since it filed for chapter 11 two years ago, comes as the youth organization nears a trial scheduled for later this month on a bankruptcy-exit plan that includes roughly $2.7 billion for abuse victims.
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Under the official committee’s deal, the Boy Scouts agreed to allow additional oversight by survivors of a compensation trust funded by the youth group’s own assets, its local councils, its major insurers and troop sponsors like the Church of Jesus Christ of Latter-day Saints.
With the official committee now supporting the Boy Scouts’ exit from chapter 11, that leaves the U.S. government’s bankruptcy monitor, some other insurers, a group of Roman Catholic institutions and a minority of abuse survivors among those still objecting to the proposed reorganization.
"Moving forward, the goal of our financial restructuring remains the same: we are steadfast in our commitment to equitably compensate survivors and preserve the mission of Scouting," a spokesman for the youth group said Thursday.
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The Boy Scouts are still trying to garner more votes for the bankruptcy plan, aiming for 75% of support among voting abuse survivors. In a vote tally last month, 73.6% of abuse victims backed the youth group’s settlement terms, shy of the target acceptance rate it believes will help ease court approval. Anything less makes the chapter 11 plan more vulnerable to challenges from the minority of abuse victims who reject it, the youth group has said.
The official committee is charged with advocating for the interests of all abuse survivors but can’t change votes on its own. For months, it urged abuse survivors to vote no, while a separate coalition of law firms led negotiations with the Boy Scouts and touted the settlement plan as a fair outcome.
The conflicting advice from different lawyers has roiled the proceedings and given rise to accusations of improper tactics to sway votes. Committee lawyers will now recommend that abuse victims accept the youth group’s offer.
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The current tally isn’t final and marks the first of several steps along a possible path out of bankruptcy for the Boy Scouts, which has been dogged for years by allegations of widespread childhood abuse. The youth group has apologized for past failures to protect children and said bankruptcy is the fairest way to resolve its liabilities and compensate survivors.
The Boy Scouts said Thursday it had also developed initiatives with input from the survivors’ committee to strengthen existing youth protection procedures designed to safeguard children from predators.
All parties contributing to the settlement plan will be shielded from liability for sex-abuse claims connected to the Boy Scouts, including its affiliated councils as well as insurers and religious groups.
The revised plan includes changes to the compensation structure for abuse survivors, the committee said Thursday. Survivors of particularly grievous abuse are being given a path to collect additional compensation in recognition of their trauma, court records show.
The youth group filed bankruptcy amid a growing wave of litigation from survivors in California, New York and other states that suspended statutes of limitations over past sexual abuse.
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Besides survivors, the plan must also win the approval of Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., who is scheduled to hold a trial on it later this month.
The plan includes mechanisms for valuing and paying abuse claims depending on the severity of the abuse and where it occurred. The Boy Scouts have said that claims will be paid in full, though some victims’ lawyers dispute that.
Write to Becky Yerak at firstname.lastname@example.org and Andrew Scurria at Andrew.Scurria@wsj.com