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Facing a growing number of child sex abuse lawsuits, the Boy Scouts of America filed for bankruptcy protection yesterday, claiming it is the only way to adequately compensate victims and allow the organization to continue to exist.
In a press release issued today, the Boy Scouts of America (BSA) announced it has filed for Chapter 11 bankruptcy in Delaware Bankruptcy Court. The organization claims it intends to use the process to create a victims compensation trust, though some fear the bankruptcy filing may prevent survivors of the rampant sex abuse problems in Boy Scouts from being adequately compensated.
The bankruptcy declaration has been anticipated for several months, with officials suggesting they may need to file for protection to handle the influx of sex abuse claims filed in New York, New Jersey and other states that have opened windows for child sex abuse claims that were previously barred by the statute of limitations.
Hundreds of lawsuits, involving thousands of plaintiffs, have been filed nationwide over the last year alone, and the organization faces substantial liability after ignoring and covering up problems with known sexual abusers for decades within the Boy Scouts.
The bankruptcy filing (PDF) lays out a detailed plan which includes the Victims Compensation Trust. The local councils are not part of the bankruptcy plan, as they are legally separate organizations, according to the press release.
“The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting. We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” Roger Mosby, President and Chief Executive Officer, said in the press release. “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process – with the proposed Trust structure – will provide equitable compensation to all victims while maintaining the BSA’s important mission.”
Experts say the filing is likely to lead to a court battle over which assets the BSA can use to pay to settle legal claims, as there may be debate over which properties are owned by local councils and which are owned by the main organization.
The central organization has an estimated $1.8 billion in assets, while the local councils are believed to have, collectively, about $3.3 billion in assets.
Boy Scout “Perversion” Files
According to allegations raised in complaints already filed, Boy Scouts of America buried information about known threats to children by keeping secret “perversion files” on those considered to be sexual predators who had worked with the organization.
Plaintiffs maintain those files were maintained in New Jersey for some time, indicating that between 1944 and 2016, there were 7,819 perpetrators who were either troop leaders or volunteers, believed to have abused at least 12,254 victims.
The Boy Scouts has confirmed the existence of the files, indicating they were used to ensure the group never knowingly allowed a sexual predator access to youths in its organization.