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Boy Scouts of America reaches $850 million agreement with victims

Posted at 11:04 AM, Jul 02, 2021
and last updated 2021-07-02 23:34:56-04

DOVER, Del. (AP) — The Boy Scouts of America have reached an $850 million agreement with attorneys representing some 60,000 victims of child sex abuse.

The agreement could prove to be a pivotal moment in the organization’s bankruptcy case.

The settlement would mark one of the largest sums in U.S. history involving cases of sexual abuse.

Attorneys for the BSA filed court papers late Thursday outlining a restructuring support agreement with attorneys representing abuse victims.

The BSA sought bankruptcy protection last year, moving to halt lawsuits and create a compensation fund for men who were molested as youngsters decades ago.

BSA released the following statement Friday:

The Boy Scouts of America (BSA) is pleased to report that we have made substantial progress in our Chapter 11 case as part of our ongoing efforts to reach a global resolution that will equitably compensate survivors and ensure Scouting’s future by resolving past abuse cases for both the national organization and local councils.

The BSA and the Ad Hoc Committee of Local Councils have reached an agreement with the Coalition of Abused Scouts for Justice, which represents a large majority of claimants in our Chapter 11 case, the Official Tort Claimants Committee (TCC), and the Future Claimants Representative (FCR). This agreement ensures that we have the overwhelming support of survivors for the BSA’s proposed Plan of Reorganization, which is a key step in the BSA’s path toward emerging from bankruptcy. Bringing these groups together marks a significant milestone and is the biggest step forward to date as the BSA works toward our dual imperatives of equitably compensating survivors of abuse and preserving the mission of Scouting.

As part of this agreement the national organization has agreed to contribute assets with up to $250 million in value to a trust that will provide compensation to survivors of abuse (the “Trust”). Working through the Ad Hoc Committee of Local Councils, local councils have been asked to make a substantial contribution in the amount of $500 million of cash and properties to the Trust. Local councils would also be credited with as much as $100 million to be paid from a separate trust (the “Special Trust”) that would be funded with contributions otherwise designated to go into the defined benefit pension plan, also known as the pension fund, which is currently over-funded. The establishment and operation of the Special Trust does not impact defined benefit pension plan payments to current or future retirees or the BSA’s current pension plan for employees. Additionally, this arrangement has no impact on the BSA’s Match Savings Plan, its current retirement savings plan.

This significant step toward a global resolution benefits the entire Scouting community, as this agreement will help local councils make their contributions to the Trust without additional drain on their assets, and will allow them to move forward with the national organization toward emergence from bankruptcy.

There is still much to be done to obtain approval from the Court to solicit survivors to vote for the BSA’s amended Plan of Reorganization. However, with this encouraging and significant step forward, the BSA is wholeheartedly committed to working toward a global resolution. Our intention is to seek confirmation of the Plan this summer and emerge from bankruptcy late this year.

Mark McKenna, a Chicago based attorney and his firm Hurley, McKenna & Mertz represent about 40 survivors of child sex abuse linked to boy scout leaders in Arizona.

McKenna said he had been talking to some of his clients since the settlement agreement was announced, and many of them expressed great relief. Some wondered why other organizations, such as the churches who had sponsored the scout leaders and events were also not contributing to the settlement, as they felt they too should be held accountable.

McKenna said some of the victims had allegedly notified church leaders about the abuse, but those in charge did not notify authorities, and dismissed the complaints.

"Only now can we really get closure for the victims. But it's only a first step because there are still entities involved, who are not taking responsibility, who are not part of this settlement. And we're going to keep working hard to make them take responsibility," said McKenna.