$2.7B bankruptcy deal reached in Boy Scouts sex abuse case

The Boy Scouts of America said it reached a landmark $2.7 billion bankruptcy settlement Thursday with thousands of men who say they were sexually abused after key parties signed onto the deal at the 11th hour the night before.

Lead negotiator Anne Andrews of the Coalition of Abused Scouts for Justice, an ad hoc committee representing thousands of sexual abuse survivors in the Boy Scouts' Chapter 11 bankruptcy, said the deal is the largest sexual abuse settlement in history.

"It's a tremendous day of celebration for the survivors of sexual abuse at the hands of Boy Scouts," said Andrews, of Andrews & Thornton in Newport Beach. "This settlement, which will hopefully be confirmed by a judge, ... is important for survivors in recognizing what they've been through, and it will stand as a record for probably many years, if not beyond our lifetimes, as the largest settlement for sexual abuse victims in the history of a bankruptcy, if not beyond. It will stand as the largest, and it will grow over time."

Experts advising the coalition expect the value of additional money, potentially gained through future litigation or settlements with the insurance companies and defendants that did not sign on to the deal, could be $2 billion to $4 billion in additional funds, Andrews said.

A previously negotiated $2.7 billion deal failed in January after less than 75% of 54,000 claimants voted to approve it. Aside from the settlement amount being inadequate, critics of the plan said it should not include third-party, non-debtor releases that would shield local boy scout councils, chartered organizations and their respective insurance carriers from current and future liability.

The new deal does not include those third party releases and claimants can continue to pursue insurance companies and charters not included in the deal, Andrews said.

Since August, John Humphrey, co-chair of the Official Tort Claimants' Committee for survivors, has urged thousands of claimants attending town hall meetings to vote no on the previous plan, saying it does not do enough to reform the Scouts' youth protection program and is "woefully" inadequate. However, saying the TCC accomplished its goal of achieving meaningful child protections, Humphrey praised the new plan Thursday.

"Survivors empowered themselves when they voted in sufficient numbers to block confirmation of the previous plan," Humphrey said in a statement. "As the TCC predicted, BSA's failure to achieve sufficient 'YES' votes on their plan, brought the BSA and its local councils back to the negotiating table. As a result, the TCC succeeded in reaching its goals of meaningful child protection, independent governance of the settlement trust and an enhanced compensation structure for survivors."

"With these accomplishments in hand, the TCC recommends that all Survivors vote to accept the new and improved Plan," Humphrey added.

The Boy Scouts of America responded to a request for comment Thursday, saying it was pleased to have entered into a term sheet reflecting an agreement with, among others, the TCC.

"With the addition of the TCC, all significant survivor constituencies now support the BSA's Plan, which is poised to establish the largest sexual abuse compensation fund in the history of the United States," the statement read. "We offer our heartfelt thanks to the TCC and all supporting parties whose perseverance and significant time commitment to mediation was instrumental in the formation of this agreement, including the Coalition of Abused Scouts for Justice and the Future Claims Representative."

Some of the individual charters, religious and civic organizations affiliated with the scouts and who are named in sexual abuse lawsuits, contributed to the settlement. The Church of Jesus Christ contributed $250 million and the United Methodist Church paid $30 million. They represent some 10,000 churches and are seen as a critical partner for the continued operations of the Boy Scouts.

Other religious groups, including the Roman Catholic Church, objected and did not participate in the settlement. They will not receive third-party releases and will not be protected from further liability, Andrews said.

"The Church of Jesus Christ and the United Methodists are the only two charter organizations that came to the table and their offer was accepted, and now has to go forward to the confirmation process," Andrews said.

U.S. Bankruptcy Judge Laurie Selber Silverstein will consider and is expected to confirm the settlement plan at a hearing scheduled for Feb. 22 in a Delaware bankruptcy court. Boy Scouts of America, 20-10343-LSS (Del. Bankruptcy Ct., filed Feb. 18, 2020).