The Boy Scouts’ latest bankruptcy plan increases the victim fund and drops the insurer’s $ 650 million offer


The latest bankruptcy plan filed by the Boy Scouts of America increases the contributions of the BSA and its local councils to a proposed trust fund for victims of child sexual abuse, while apparently refraining from a controversial settlement with any of the BSA’s insurers.

As part of a revised plan presented late last week, the Boy Scouts are offering to issue a $ 80 million unsecured promissory note to a trust fund for abuse victims. The BSA also suggests using earmarked assets to cover post-bankruptcy operating costs, which would provide abuse survivors with up to $ 50 million in unrestricted cash. With the changes, the BSA’s proposed contribution to the Trust Fund would increase from about $ 120 million under an earlier plan to up to about $ 250 million.

The BSA also said its community councils would add $ 500 million to the Abuse Victims Fund, up from $ 425 million offered in the previous plan. The new proposal calls for councils to contribute $ 300 million in cash and the remainder in real estate with an estimated total value of $ 200 million.

The BSA, its roughly 250 local councils and hundreds of sponsoring organizations such as churches and citizens’ groups would be released from further liability in return for contributions to the trust fund and the transfer of insurance rights.

In a prepared statement, the Boy Scouts described the revised plan as “a significant step” towards a worldwide resolution of allegations of abuse.

“The BSA hopes that this or a very similar plan will be supported by a large majority of the survivors,” said the organization.

A hearing on the latest proposal is scheduled for July 20th.

Meanwhile, the Boy Scouts appear to be pulling back on a previously announced deal in which one of the group’s insurers, The Hartford has agreed to pay $ 650 million in return for the exemption from further obligations from policies from 1971 in the victim trust. The arrangement allows The Hartford to pay a lesser amount if the BSA or Settlement Trust enter into an arrangement with another major BSA insurer, Century Insurance Group, and Century Settlement Amount is less than double that of The Hartford, or $ 1.3 billion.

The Hartford settlement was harshly criticized by abuse lawyers, who estimate the insurer’s liability risk at billions of dollars.

“We see it as a positive thing to drop Hartford,” said Jim Stang, an attorney for the official committee that represents victims of abuse, on Monday.

The BSA admitted in last week’s complaint that if the Hartford Accord is incorporated into its plan, it will not be able to win support for a global settlement of the sexual abuse allegations that have bankrupted the organization. Attorneys representing the Official Committee, a group of plaintiffs called the Coalition of Abused Scouts for Justice, and potential future abuse plaintiffs wrote to BSA attorneys two weeks ago stating that abuse survivors would “under no circumstances” support a plan that would end the Hartford settlement .

“It appears that the global resolution plan cannot be confirmed insofar as it includes the Hartford Insurance Agreement unless changes are made … that are acceptable to direct abuse claim holders,” wrote BSA attorneys.

Boy Scout attorneys said they would ask the bankruptcy judge at next month’s hearing if they have any obligation to pursue the settlement with The Hartford, which requires court approval given the universal opposition from abuse victims. If not, the BSA attorneys intend to remove the settlement from the plan.

The Boy Scouts of America, based in Irving, Texas, filed for bankruptcy protection in February 2020, filed hundreds of lawsuits, and set up a compensation fund for men who were molested by Boy Scouts or other leaders decades ago as teenagers.

Victims of abuse attorneys have announced that they will be taking care of property and assets owned by BSA local councils. The councils, which run the day-to-day operations for the local troops, are viewed by the scouts as legally separate entities, although they share insurance policies and are considered “related parties” in bankruptcy.

Boy Scout attorneys have said that abuse victims could have between $ 2.4 billion and $ 7.1 billion, including insurance rights. The official victims’ committee, known as the criminal justice committee, said to act as the trustee for all abuse victims, estimates the value of around 82,500 sexual abuse lawsuits at approximately $ 103 billion.

Copyright 2021 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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