Boy Scouts bankruptcy: Reorganization plan ‘woefully’ inadequate
Boy Scouts of America is proposing to pay $220 million toward a trust to compensate tens of thousands of former members who say they were abused during their time as scouts, according to a statement from the committee that represents survivors in the case.
Another $300 million may come from a voluntary contribution from local councils, the Boy Scouts said in court documents filed Monday, but the local organizations have given no formal commitment.
The number is a fraction of the $1 billion of the organization’s estimated value, and a sliver of the value of its subsidiaries, including local councils as well as various trusts and endowments, which USA TODAY estimates could exceed $3.7 billion.
The proposal is part of a reorganization plan put forth by the nonprofit detailing how it intends to handle the massive child sex abuse case that’s threatening its existence – the largest ever involving a single national organization – and emerge as a viable entity.
It comes a little more than a year after Boy Scouts filed for bankruptcy in federal court in Delaware. At the time, the organization said it faced 275 lawsuits in state and federal courts plus another 1,400 potential claims. Nearly 95,000 claims were filed by the November deadline set by the bankruptcy judge.
The proposed settlement would amount to about $6,000 per claimant, even after the total number of claims is reduced after duplicates are deleted and other reviews. That number assumes an even distribution among survivors and does not reflect issues related to statutes of limitations or specific acts of abuse.
Boy Scouts says it will put forth all unrestricted cash and investments above the $75 million it says it needs to continue operations. It also will contribute its art collection, which includes original Norman Rockwell pieces, as well as two facilities in Texas and its oil and gas interests, consisting of more than 1,000 properties in 17 states.
But the proposal may be dead on arrival. The survivors’ Torts Claimant Committee objects to the plan.
“As a fiduciary to all sexual abuse survivors, the TCC has thoroughly investigated the assets and liabilities of the BSA and its local councils,” the committee said in a statement, “and concluded that the BSA’s reorganization plan woefully fails to adequately compensate sexual abuse survivors or provide any enhanced systematic protections for future generations of Scouts.”
Gill Gayle, an abuse claimant who serves on the committee, said it was only after juries began awarding survivors million-dollar verdicts that Scouts realized “the sum total of paying for their deeds exceeds their monetary value.”
“We’re talking about them trying to get a discount on child abuse, on systematic child abuse that occurred decade after decade after decade,” Gayle said.
As a result of the violent sexual abuse he alleges he suffered as a kid in Scouts, Gayle said he spent $125 to $150 an hour on therapy for 26 years, which was rarely covered by insurance. The Scouts’ proposed settlement would barely reimburse him for that cost alone.
Paul Mones, who tried a landmark case in 2010 that resulted in $19.9 million in damages, said that result should have been a wakeup call for the organization. Instead, he said, it is still trying to go back to business as usual.
“There was a forest fire in their backyard and they were watching television and having dinner and not thinking anything was wrong,” Mones said. “Now the forest fire is at their door and they still think, though the plan will reflect some cutting back, that they can have a plan that will not really inflict any kind of serious pain on them.”
Much about Boy Scout’s finances remains unknown, which could complicate the approval process. What is owned by local councils, and in turn how much of that should go to victims, remains a central point of contention.
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Another sticking point is how much Boy Scouts deems core to operations or restricted by donors, and thus not available to compensate survivors.
Tim Kosnoff, a lead attorney with the group Abused in Scouting, said the gulf is vast between what assets Boy Scouts have proposed to contribute and what survivors will approve – maybe too vast for the nonprofit to close before it runs out of money. The organization has said it needs to exit bankruptcy by August or risk a cash shortage, citing declines in revenue due to COVID-19 restrictions that have closed Scout camps and diminished fundraising opportunities.
“I just don’t see a plan that would be acceptable to the victims coming together in time for the Boy Scouts,” Kosnoff said. “I think they’re finished. I think they’re out of time.”
Will victims get access to local Scout assets?
As it stands, the plan only…
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