Boy Scouts bankruptcy plan missed vote mark for sex abuse claimants

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DOVER, Delaware (AP) – A preliminary vote report on the Boy Scouts of America bankruptcy says the group’s reorganization plan has failed to gain the desired support from tens of thousands of men who say they have been abused sexually in their childhood.

The report, filed earlier this month, shows that 73% of the 53,888 valid ballots were cast in favor of the plan, with just under 27% against. The Boy Scouts hoped to garner at least 75% of the vote.

Under the rules of a typical Chapter 11 case, the Boy Scouts needed the approval of two-thirds of the sexual abuse claimants who voted. However, since the BSA plan includes liability waivers for non-debtor third parties, including local Boy Scout councils and troop sponsorship organizations, a higher level of support will likely be required. It’s unclear exactly what level of support the BSA plan needs to gain court approval, but the bankruptcy code requires at least 75% voter approval in cases involving asbestos claims and releases by third parties.

A final voting report is expected on Jan. 17, but early results could challenge the Boy Scouts of America’s goal of compensating survivors for decades of child sexual abuse by Scoutmaster and others. by being able to come out of bankruptcy on a sound financial basis and continue the Scout movement.

“We are encouraged by these preliminary results and are actively engaging key parties in our case in the hope of securing additional agreements, which could potentially garner additional support for the plan before confirmation,” the Boy Scouts said in a statement.

Opponents of the plan, including the official committee appointed to represent all abuse seekers, said the vote showed the Boy Scouts’ proposal was inadequate.

“This was a poorly constructed plan led by a group of lawyers who wanted to achieve a quick and inexpensive bankruptcy settlement,” said Jason Amala, a lawyer whose law firm represents more than 1,000. applicants. “Many of these law firms have signed clients on engagement letters in which they have not even agreed to represent their client if the case were to be pursued outside of bankruptcy. “

John Humphrey, co-chair of the official asylum seekers committee, said survivors of abuse understood the plan was not adequately compensating them.

“The prospect of litigation against BSA, its local councils, chartered organizations and their respective insurers will not deter those who have spent their lives seeking justice,” Humphrey said in a prepared statement. “The Boy Scouts are touting the plan and the settlements as historically high. Viewed from the perspective of the individual victim of violence, regulations are historically low. “

Meanwhile, lawyers continue to gather information and take depositions from opposing parties ahead of a hearing starting February 22 to determine whether Judge Laura Selber Silverstein should uphold the plan.

The plan calls for the Boy Scouts and its some 250 local councils to contribute up to $ 820 million in cash and property to a fund for abuse seekers. They would also cede certain insurance rights to the fund. In return, local councils and the national organization would be released from any additional responsibility for sexual abuse complaints.

The plan also includes settlement agreements with BSA’s two largest insurers, Century Indemnity Co. and The Hartford. Century and the affiliates would contribute $ 800 million to the fund in return for a waiver of liability for abuse claims, while The Hartford would pay $ 787 million. Other insurers have agreed to contribute around $ 69 million.

The Century settlement provides for additional contributions from the BSA and its local councils on behalf of charter troop sponsorship organizations such as churches, civic clubs and community groups. They include a commitment of $ 40 million from local councils and potential additional payments of up to $ 100 million from BSA and local councils due to growth in membership due to continued sponsorship of chartered organizations. scout units.

Meanwhile, the former largest sponsor of BSA troops, The Church of Jesus Christ of Latter-day Saints, commonly known as the Mormon Church, has agreed to contribute $ 250 million to the complaints fund for abuse involving the church. United Methodist Church affiliates have agreed to contribute $ 30 million to the fund, and a committee representing United Methodist churches that have sponsored Scouting activities has agreed to help lead an effort to raise an additional $ 100 million. from other troop sponsorship organizations.

Sponsoring organizations, like ceding insurers, would be released from any additional liability in return for their contributions to the fund.

In total, the contributions would bring the asylum seekers’ compensation fund to more than $ 2.69 billion, which would be the largest comprehensive sexual abuse settlement in U.S. history.

The Boy Scouts, based in Irving, Texas, filed for bankruptcy protection in February 2020, seeking to end hundreds of individual lawsuits and create a fund for men who say they have been sexually abused in their childhood. Although the organization faced 275 lawsuits at the time, it faced more than 82,000 sexual abuse claims in the bankruptcy case.

An ad hoc group called the Coalition of Abused Scouts for Justice played a dominant role in the bankruptcy case and the formulation of the BSA reorganization plan, despite the existence of an official committee charged with representing the best interests of the BSA. all abuse seekers. The coalition represents nearly 18,000 asylum seekers and is affiliated with more than two dozen law firms that collectively represent more than 60,000 asylum seekers. He has been at the center of various disputes over information sharing, the large number of complaints filed and how the BSA reorganization plan and trust distribution procedures were worked out.

The coalition said in a statement that it was continuing negotiations with all parties and that the plan offered survivors “the best and quickest route to closure, as well as fair, just and equitable compensation.”


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