Boy Scouts reach $1B Settlement Agreement With Victims’ Groups, Insurers

Two major backers of the Boy Scouts of America have agreed to pay $1 billion into a settlement fund for victims of child sexual abuse perpetrated by the organization’s employees and volunteers.

One of the Boy Scouts’ primary insurers, The Hartford, announced it will pay $787 million into a fund established for the victims, according to a September 14 press release. In addition, the Church of Jesus Christ of Latter-day Saints, which was a major backer of the Boy Scouts of America until last year, agreed to pay in another $250 million into the settlement fund for abuse victims.

The settlement agreements must still be approved by U.S. Bankruptcy Judge Laurie Selber Silverstein, who is overseeing the bankruptcy process for the Boy Scouts of America (BSA).

Thousands of Boy Scouts abuse lawsuits have been filed in recent years, each raising similar alleging that the organization covered up decades of credible reports involving problems with volunteers and employees, maintaining a set of records known as the “perversion files” dating back to 1944.

Facing clear signs of massive liability, a Boy Scouts of America bankruptcy was filed last year, which now includes about 97,000 claims presented against the organization, seeking damages for abuse or assault while children, which was allegedly caused by negligence of the organization. It is the largest sex abuse case involving a national organization in U.S. history.

In August, Judge Silverstein granted approval for an $850 million settlement agreement reached between the BSA, the Coalition of Abused Scouts for Justice and other groups, which would allow the Boy Scouts to emerge from Chapter 11 bankruptcy by the end of the year. However, there were concerns that its insurers, who would have to pay the bulk of the settlement agreement, would go along with the plan.

Previously, insurers, including The Hartford, had indicated they opposed the Boy Scouts settlement agreement, accusing some of those who claimed they were sexually abused as children of making fraudulent claims. Judge Silverstein shot down that argument however, saying debtors had met the relevant standard for the settlement agreement’s approval.

The Hartford’s decision, according to the press release, came with an agreement that the BSA and the local Boy Scout councils “will fully release The Hartford from any obligation under policies The Hartford issued to the BSA and its local councils”, the press release states.

The Church of Jesus Christ of Latter-day Saints, the leading Mormon organization in the world, also said its agreement would result in the Church being released from further liability involving child sex abuse claims against the BSA.

However, some insurers and some victims’ rights groups, still appear to be opposed to the settlement and reorganization plan, after a new reorganization and settlement plan, the fifth filed so far, was submitted to the court on Tuesday, which they say contain major changes and additions, despite a key disclosure statement hearing set for September 1. The opposing parties say the new plan leaves them with too short a window before the hearing to review the plan and file objections.

They have asked for the court to postpone the hearing, and the Court has agreed to hear the postponement request next Tuesday at the time originally agreed upon for the disclosure statement hearing.