The final salute Sex abuse scandals push Scouts to bankruptcy
The Boy Scouts of America, after decades of being crippled by child sex abuse claims, plans to file for Chapter 11 bankruptcy by early Tuesday, the Daily News has learned.
Two lawyers who individually have represented hundreds of victims confirmed to The News that the 110-yearold organization will be filing papers in Delaware federal bankruptcy court.
As the embattled Boy Scouts begin the long process of restructuring debt, any pending sex abuse claim against the organization will be put on hold, the lawyers said.
“It’s an injunction against any case that’s filed in any state across the country,” said attorney Aitan Goelman, one of the lawyers at Abused in Scouting, a cohort of law firms that represents thousands of abuse victims. “The creditors will file their claims. All other liabilities will be extinguished.”
The Boy Scouts did not immediately respond to a request for comment Monday.
Rumors of the Boy Scouts’ bankruptcy had been swirling since December 2018, as it struggled with declining membership and rising costs.
The national organization, which has about $1.4 billion in assets, was reportedly mulling a strategy that would compensate victims while protecting the hefty pot of money held by its many local councils — about $3.3 billion, according to The Wall Street Journal.
“You’re talking about thousands of perpetrators,” Seattle-based lawyer Michael Pfau, who has represented more than 300 Boy Scout victims in 34 states, told The News. “You’re talking about tens of thousands of victims. This will be the largest bankruptcy the country has ever seen, and likely one of the largest corporate bankruptcies.”
According to Pfau, the central issue in the bankruptcy “is how are the local councils handled.”
“The local councils are really the eyes and ears of the Boy Scouts … the local councils not only hold enormous assets, they are all responsible in many cases for the abuse,” he said.