Court Approves $2.5B Boy Scouts Sex Abuse Settlement Fund

Final approval of the Boy Scouts sex abuse settlement fund will allow the organization to move out of bankruptcy.

A federal judge has granted approval of a $2.5 billion settlement fund for Boy Scouts of America child sex abuse victims, paving the way for the organization to emerge from bankruptcy protection and resolve tens of thousands of lawsuits.

Over the past few years, tens of thousands of individuals have stepped forward to pursue Boy Scouts sex abuse lawsuits, each raising similar allegations that the organization engaged in decades of covering up 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, Boy Scouts of America filed for bankruptcy in 2020, to manage and resolve the mounting litigation, which has become the largest sex abuse case involving a single national organization in U.S. history.

On Thursday, U.S. Bankruptcy Judge Laurie Silverstein, of the U.S. Bankruptcy Court for the District of Delaware, approved plans to create a $2.46 billion victim’s fund negotiated by abuse survivors, the Boy Scouts, insurers and some of the organization’s main backers.

Following the proposal of the settlement agreement in late July, Judge Silverstein had parties rework some parts of the deal, with the biggest change being Judge Silverstein’s refusal to grant the Church of Jesus Christ of Latter-day Saints extensive legal protection from all future lawsuits.

“The Court, having considered the Confirmation of the Plan, finds and determines that all such provisions are consistent with the provisions of the Bankruptcy Code,” Judge Silverstein wrote in a September 8 Supplemental Findings of Fact and Conclusion of Law (PDF).

Silverstein agreed that the Boy Scouts of America would contribute $78 million, its local councils would contribute another $515 million, the United Methodist Church would contribute $30 million, and major insurers will pay $1.65 billion. However, Silverstein rejected a proposed $250 million settlement agreement with LDS, indicating that the money could not be added to the settlement fund because it required a release of all claims against the church; not just those involving the Boy Scouts. The Church will negotiate a new amount for its part of the deal before the agreement is signed.

However, one more federal approval by another judge is needed before the deal is finalized, which is likely to take several months.