By RANDALL CHASE, Associated Press
DOVER, Del. (AP) – The Boy Scouts of America have reached an $ 850 million deal with lawyers representing some 60,000 victims of child sexual abuse in what could prove to be a pivotal moment in the bankruptcy of the organization.
The agreement filed in court by lawyers for BSA on Thursday night would mark one of the largest sums in U.S. history in sexual abuse cases. The filing, known as the Restructuring Support Agreement, includes the BSA, victims of abuse, local Boy Scout councils and lawyers appointed to represent victims who may file future claims.
“After months of intensive negotiations, the debtors reached a resolution with every official representative and principal creditor,” the BSA lawyers wrote.
The Boy Scouts of America filed for bankruptcy protection in February 2020, ending hundreds of lawsuits by men who were molested as young decades ago by Boy Scout leaders or other leaders. The purpose of the filing was to try to achieve a comprehensive resolution of abuse complaints and to create a compensation fund for victims.
But lawyers for the Irving, Texas-based BSA had previously been unable to come to an agreement with victims, local Boy Scout councils and insurers on how to compensate victims while allowing the 111-year-old organization to continue to operate.
Thursday’s agreement signals that the BSA recognizes that disagreements remain between lawyers representing victims of abuse and those representing BSA insurers.
In an earlier court filing Thursday, lawyers for some insurance companies accused the BSA of allowing lawyers for victims of abuse to rewrite the BSA’s restructuring plan to favor their clients.
“With only the fox guarding the henhouse, the result is totally at odds with what BSA itself has claimed is necessary for a confirmable plan and is licensed under the bankruptcy code,” the insurers wrote.
Lawyers for insurers appear to be concerned, among other things, that decisions about insurance coverage issues will be made without their input.
Meanwhile, Boy Scout lawyers are also asking U.S. bankruptcy judge Laurie Selber Silverstein to declare that they have no obligation to seek court approval of a previously announced settlement with The Hartford, one of the BSA insurers.
The Hartford agreed to pay $ 650 million into the victims trust in exchange for being released from any further obligations under the 1971 policies.
The Hartford settlement has come under heavy criticism from abuse attorneys, who estimate the insurer’s liability exposure to billions of dollars. They made it clear that the victims would not support any plan that included the Hartford settlement.
The Boy Scouts said between $ 2.4 billion and $ 7.1 billion, including insurance fees, may be available for victims of abuse. Lawyers for a committee that acts as the fiduciary representative of all the victims in the bankruptcy case have estimated the value of some 82,500 sexual abuse claims at around $ 103 billion.
Matthew Sturdevant, spokesman for The Hartford, said the company’s deal with the Boy Scouts “is a critical part of moving this bankruptcy case to a conclusion.”
“We are disappointed that the Boy Scouts of America have chosen to flout the organization’s principle of keeping its promises by seeking to reject a carefully negotiated and mutually agreed upon deal that appropriately values Hartford’s obligations,” Sturdevant said. in an email.
In a joint statement, victims ‘representatives as well as future plaintiffs’ representatives said the Restructuring Support Agreement will enable the Boy Scouts to emerge from bankruptcy “while providing meaningful compensation to victims and obliging insurers Boy Scouts to abide by the terms of insurance policies purchased by Boy Scouts and their affiliates over several decades.
In a revised plan submitted just two weeks ago, the BSA offered to issue an $ 80 million promissory note to a trust fund for victims of abuse. He also proposed maneuvers to make up to $ 50 million in additional cash available for survivors of abuse. The proposed changes would increase BSA’s proposed contribution to around $ 250 million, more than double a previous plan.
Under a new plan due to be tabled on Friday, the more than 250 local BSA councils would contribute $ 600 million to the fund for victims of abuse, doubling an offer made earlier this year. Under this plan, the BSA and local councils would be released from all liability in return for their contributions to the victim fund.
A hearing in the case is scheduled for July 20.
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