Boy Scouts of America agrees $850,000,000 settlement

The Boy Scouts of America (BSA) has reached a preliminary $850m (£617m) settlement with 60,000 survivors of historic sexual abuse.  The agreement (known as a Restructuring Support Agreement) has yet to be approved by the Bankruptcy Court in Wilmington, Delaware – and by the survivors.

The agreement, filed in court last week is a step toward resolving a complex bankruptcy case, and includes the BSA national leadership, survivors, and local BSA councils.

Lawyers representing survivors, note that negotiations have yet to be resolved with the Boy Scouts’ insurers, who could be required to contribute billions of dollars to the compensation fund. Previously, one insurer had agreed with the BSA to pay $650 million into the settlement trust fund, in exchange for being released from potential further liabilities under policies mostly issued in the early 1970’s.  However, following objections from lawyers for the survivors who say that the settlement with that insurer is too low, the BSA may now seek to withdraw from that agreement.  

The BSA filed for Chapter 11 protection in February of 2020 in an attempt to halt thousands of historical claims accusing scoutmasters and other leaders of sexual abuse. The filing was intended to try to reach a global resolution of abuse claims and create a compensation fund, without claims having to be settled on an individual basis. In 2010 a jury ordered that the Scouts pay $18.5 million to a Scout who was abused in the 1980s. 

As and when the settlement fund is finalised, payments will be made according to the severity of abuse, whether an abuser has been accused by multiple victims, or was named in confidential internal files the Boy Scouts kept on suspected abuse.  Survivors whose claim would have a better chance of succeeding outside of bankruptcy will get more than those with less supporting evidence. 

A range of possible payments, from $3,500 for sexual abuse that involved no touching, to as much as $2.7 million for sexual penetration by an adult perpetrator with other aggravating circumstances, were set out in the papers lodged at Court.

Local BSA councils are expected to contribute $600 million to the survivors’ fund. The monies would mostly come from the sale of unused assets, but several BSA local councils have already had to put camps on sale to raise funds. One, the Greater Hudson Valley Council, which oversees several counties near New York City, placed three of its camps up for sale earlier this year.

Ken Rothweiler, an attorney who represents over 16,800 claimants said in a statement:

We will now negotiate with the insurers and sponsoring and chartering organizations who have billions of dollars in legal exposure, of which a substantial portion is necessary to fairly compensate the survivors.”

Lawyers for the BSA have said that between $2.4 billion and $7.1 billion, including insurance rights, might be available for abuse victims.  However, the official survivors committee, which is known as the Tort Claimants Committee and acts as a fiduciary to look after the interests of all BDS abuse survivors, estimates the value of the 82,500 sexual abuse claims made to date, at approximately $103 billion.

It should be noted that the BSA operates solely in the USA and acts independently from other scouting organisations around the world.


James Chambers, Associate, BLM
james.chambers@blmlaw.com

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