Boy Scouts bankruptcy settlements remain unclear
Deciding victims’ payouts fraught with complexities
Deep in hundreds of pages of legal arguments filed this summer in the Boy Scouts of America bankruptcy case are the first glimpses of some of the most vexing decisions ahead: Which sexual abuse victims will receive settlement money, and how much?
More than 90,000 claims were filed, making it the largest child sexual abuse case involving a single national organization. The largest Catholic diocese bankruptcy cases involved a few hundred claims.
Removing duplicates was the first and easiest task, dropping the total to 82,500. The harder work lies ahead.
One person, the bankruptcy trustee, will make the decisions, guided by criteria within a plan from the Boy Scouts that must be approved by all parties and a bankruptcy judge. According to the latest plan proposed by the Boy Scouts, three main topics probably will drive the decisions: how severe the abuse was, where it occurred and how well the claimants can document it.
The court got a preview of what the trustee will see in letters from thousands of abuse survivors. In graphic detail, they describe being blindfolded and stripped naked at jamborees in the woods of Appalachia, pinned down in showers at camps in the Midwest or raped in tents in the desert.
Within their filings, the Boy Scouts disclosed that nearly a third of those who filed abuse claims say they were raped, nearly a quarter say they were forced into oral sex, and others cite masturbation or touching.
Countering factors include the advertising blitz by law firms, which contributed to the flood of claims. Thousands of TV and radio ads paid for by law firms urged victims to come forward, offering confidentiality and “significant financial compensation.” One suggested the victims’ fund could hit $1.5 billion.
The Boy Scouts argued the campaign contained false and misleading statements, but the bankruptcy judge dismissed the Scouts’ attempt to stop them, citing First Amendment rights.
How much money will be available for victims once they’re evaluated is another one of many unknowns holding up the case 18 months after it was filed.
In July, the Scouts announced an $850 million settlement with the bulk of abuse claimants and put forth a plan for reorganization. In a footnote, the Scouts acknowledged that would cover only 10% to 30% of the total estimated cost.
Last month, a bankruptcy judge struck down two provisions, sending the Scouts back to the negotiating table and pushing back a hearing on the details of their plan to Sept. 21.
A USA TODAY analysis of court filings suggests that as many as half of those who filed claims could end up with a few thousand dollars – a fraction of what their counterparts have been allotted in more than a dozen bankruptcy cases involving Catholic dioceses.
One point of contention involves statutes of limitations – laws that prohibit survivors from suing for abuse after a set period of time.
USA TODAY found Scouts’ identified 59,000 (71%) as potentially too late under state statutes.
The Boy Scouts’ insurance companies balk at paying anything in states where a civil claim would be barred, but the Scouting organization doesn’t exclude these claims in its plan. Instead, it proposes a discount reflecting the breadth of the statute in the state where the victim lives or was abused.
For a rape claim filed in Alabama, where child abuse survivors can file lawsuits only until their 25th birthdays or within two years of the abuse, the base range would drop to $6,000 to $60,000, down from $600,000. For less severe claims, such as touching, the base could fall as low as $750.
An unusual provision in the Scouts’ plan would allow claimants to wait for up to a year to see if the laws in their state change in their favor. Changing sentiments around statutes of limitations have prompted state legislatures to loosen restrictions; 35 states introduced such bills in 2021, according to a tracker from the nonprofit Child USA.
Marie Reilly, a professor at Penn State Law who has studied the outcomes of Catholic diocese bankruptcies, said claims are usually evaluated based on whether they would have been viable in civil court when an organization filed for bankruptcy.
Placing a price tag on abuse is a tricky matter, fraught by the vagaries of a largely volunteer organization and memories dulled by trauma and the passage of time. Many of the survivors in the case experienced abuse in the ’70s and ’80s. For some, filing a claim was the first time they had told anyone what happened.