$800 million interim settlement reached in Boy Scouts bankruptcy for victims’ compensation fund

DOVER, Delaware — Lawyers in the Boy Scouts of America bankruptcy case have reached a tentative settlement under which one of the organization’s largest insurers would contribute $800 million to a fund for victims of abuse sex with children.

The agreement announced Monday calls for Century Indemnity Co. and its affiliates to contribute $800 million to the fund in exchange for being released from further liability for abuse claims. The payment would bring the amount of money in the proposed trust to more than $2.6 billion, which would be the largest sexual abuse settlement in US history.

The settlement comes as more than 82,000 sex abuse claimants face a Dec. 28 deadline to vote on a previously announced Boy Scouts reorganization plan.

This plan called for the Boy Scouts and its approximately 250 local councils to contribute up to $820 million in cash and property to a fund for victims. They would also assign certain insurance rights to the fund. In return, local councils and the national organization would be relieved of any further liability for claims of sexual abuse.

The plan also includes settlement agreements involving another of the Boy Scouts’ main insurers, The Hartford, and the BSA’s former largest troop sponsor, The Church of Jesus Christ of Latter-day Saints, commonly referred to as the Mormon Church. The Hartford agreed to pay $787 million to the victims’ fund, and the Mormons agreed to pay $250 million. In exchange, both entities would be released from any further liability regarding child sexual abuse claims.

The Century settlement, which is subject to court approval, provides for additional contributions from the BSA and its local councils on behalf of approved sponsor organizations. They include a commitment of $40 million from local councils and potential additional payments of up to $100 million from the BSA and local councils attributable to membership growth due to continued sponsorship of Scout units by the chartered organizations.

“This is an extremely important step forward in BSA’s efforts to fairly compensate survivors, and we hope it will lead to further settlement agreements with other parties,” the Boy Scouts said. in a prepared statement. “In addition to our ongoing negotiations with other insurers, the BSA has worked diligently to create a structure that will allow Roman Catholic-affiliated churches and United Methodist-affiliated churches that have sponsored Scouting units to contribute to the trust. proposed settlement to compensate survivors.”

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 were sexually abused as children. Although the organization faced 275 lawsuits at the time, it now faces more than 82,000 sexual abuse claims in the bankruptcy.

Lawyers for an ad hoc group called the Coalition of Abused Scouts for Justice, which represents about 18,000 abuse claimants, said in a press release that the Century settlement is another reason for victims to vote for the plan. reorganization of the BSA.

“Not only is the coalition creating the largest compensation fund possible for survivors, it’s the only fund on the table, and it disappears with a ‘no,'” said the lawyer and co-founder of the coalition, Anne Andrews. “The coalition also continues to work with the Boy Scouts of America on accountability and safety measures to ensure that no child will have to endure the horrific damage and abuse our customers have experienced.”

The coalition, which is affiliated with more than two dozen law firms, played a dominant role in the bankruptcy despite the existence of a formal committee to represent the best interests of all abuse plaintiffs. He has also been at the center of various disputes over information sharing and how the BSA’s reorganization plan and trust distribution procedures were developed.

Opponents of the plan include several other law firms, as well as the official Abuse Plaintiffs Panel appointed by the U.S. Bankruptcy Trustee. The committee said the plan is “grossly unfair” and represents only a fraction of the parties’ potential liabilities to the deal and what they must and can pay.

The committee, for example, said settlements with local Scout councils would leave them with more than $1 billion in cash and property above what they need to fulfill the Scouting mission. The committee also noted that sponsoring organizations such as churches and civic groups can avoid liability for abuse claims dating back to 1976 simply by transferring their interests in insurance policies purchased by the BSA and local councils to the victims’ fund, without contributing cash or property.

News of the Century settlement came the same day an Indiana bankruptcy judge approved a $380 million settlement involving USA Gymnastics and more than 500 victims of sexual abuse by the former team doctor. National Larry Nassar. The settlement, which also involves the U.S. Olympic and Paralympic Committee, is in addition to the $500 million that Michigan State University agreed to pay in 2018 to settle lawsuits brought by more than 300 victims of Nassar, a former associate professor and school sports doctor.

The $880 million in the combined Nassar settlements average more than $1 million per victim, while the proposed $2.6 billion settlement in the Boy Scouts bankruptcy averages about $31,600 per victim. .

___

This story was first published on December 13, 2021. It was updated on December 14, 2021 to correct that a settlement with the victims of sports physician Larry Nassar involved Michigan State University, not the ‘University of Michigan.