Boy Scouts of America, hobbled by numerous sex-abuse lawsuits, files for bankruptcy

Boy Scouts of America, hobbled by numerous sex-abuse lawsuits, files for bankruptcy

The Young Boy Scouts of America has filed for personal bankruptcy security.

Dealing with installing legal costs from defending itself versus lawsuits declaring sexual abuse of young boys, the venerable nonprofit looked for Chapter 11 security in a court filing early Tuesday.

A representative for the Boy Scouts of America said in a statement that the filing had “2 crucial objectives: equitably compensate victims who were hurt during their time in Scouting and continue carrying out its mission for several years to come. The BSA intends to utilize the Chapter 11 procedure to create a Victims Compensation Trust that would supply fair settlement to victims.”

The Boy Scouts said that only the nationwide organization had actually filed for Chapter 11 which local councils that supply programs and other services are economically independent.

” The BSA cares deeply about all victims of abuse and best regards apologizes to anybody who was damaged throughout their time in Scouting. We are annoyed that there have been times when people benefited from our programs to harm innocent children,” Roger Mosby, BSA’s president and ceo, said in a statement Tuesday.

” While we know absolutely nothing can reverse the tragic abuse that victims suffered, our company believe the Chapter 11 procedure– with the proposed Trust structure– will supply equitable compensation to all victims while maintaining the BSA’s important mission,” he said.

Download the NBC News app for breaking news

Michael Pfau, whose Seattle-based law office, Pfau, Cochran, Veretis and Amala, represents near to 300 people who say they were abused as Scouts in 30- plus states, called the filing historic.

” It will be far larger in regards to the numbers of victims and even more complicated than any of the bankruptcies we have actually seen so far including the Catholic Church,” Pfau stated.

Let our news fulfill your inbox. The news and stories that matters, delivered weekday mornings.

Those personal bankruptcies included individual dioceses or archdioceses, Pfau said, while “this involves victims from all 50 states and a number of U.S. areas.”

” You’re taking a look at countless abuse survivors making claims,” he stated. “This is much larger than the insolvency filings involving the Catholic Church.”

In December 2018, the BSA telegraphed that it might seek this treatment when it hired the law office Sidley Austin LLP and revealed that it was “working with experts to check out all options available to make sure that the local and nationwide programs of the Kid Scouts of America continues undisturbed.”

Now that the Texas-based company has declared insolvency security, the U.S. Trustees Office will choose a financial institutions committee that will include a number of abuse victims, Pfau said. The committee, in turn, will work with an insolvency law practice that will represent the interests of creditors in settlements with the BSA.

The various abuse cases against the BSA that have actually been filed in state courts will be halted and transferred to federal personal bankruptcy court for adjudication, Pfau said.

For the abuse victims, the BSA’s personal bankruptcy filing has advantages and disadvantages, Pfau stated.

” The pro is that is a far shorter process than going through a trial and the appeals process in state court,” he said. “The bankruptcy procedure will most likely take anywhere from 18 months to two years from start to finish.

” However the cons are significant,” Pfau included. “Each private loses his chance for a jury trial in state court, which is truly the most powerful weapon an abuse victim has. Among the primary factors the BSA filed for insolvency is to avoid jury trials.”

Why?

” Juries do not like fact patterns where children are abused by trusted leaders,” Pfau stated. “An entity like the Kid Scouts has to consider their exposure.”

Like the Catholic Church, the Young Boy Scouts “have a dreadful, sordid history of child abuse in the ranks,” Pfau said. “They fought extremely, really aggressively to keep the degree of the abuse from the general public. Now they’re dealing with a wave of legal reform that is sweeping throughout the nation, with states revising their statutes of restrictions to permit victims to sue.”

So for the BSA, seeking insolvency protection is actually the only option if it wants to make it through.

” It’s a genuine day of reckoning for the Kid Scouts,” Pfau said.

The organization stated Tuesday that Scouting is much safer than it’s ever been, saying “around 90%of pending and asserted abuse claims against the BSA associate with abuse that took place more than 30 years back.”

Founded in 1910 and long thought about a bastion of standard worths, the BSA reported in 2016 that it has more than 1.26 million Cub Scouts, nearly 830,000 Young Boy Scouts and about 960,000 adult volunteers.

Image: Corky Siemaszko Corky Siemaszko

Corky Siemaszko is a senior writer for NBC News Digital.

Find Out More