The Hartford to pay out $787M for abuse claims against Boy Scouts

HARTFORD — Insurance giant The Hartford has reached a tentative settlement agreement worth $787 million with the bankrupt Boy Scouts of America and attorneys representing tens of thousands of men who allege that they were sexually abused decades ago by scoutmasters and others.

The Hartford would pay the $787 million, before tax, for claims associated with policies mostly issued in the 1970s, according to an agreement-inprinciple announced Tuesday. In return for the payment, the BSA and its local councils would release the Hartfordbased company from further liability related to sexual abuse claims.

The new agreement supersedes a $650 million settlement agreement with the BSA that was announced in April. The previous deal did not include the Boy Scouts’ local councils or representatives of a majority of the claimants.

Company officials said they expect to receive court approval in late 2021 for the new agreement. But they also said “no assurance can be given that all the conditions ... will be satisfied or that bankruptcy court approval, if obtained, will not be delayed for various procedural reasons.”

The new pact was negotiated after a bankruptcy judge last month rejected two major components of an $850 million deal that the BSA had reached with attorneys representing a majority of abuse claimants.

Judge Laura Selber Silverstein turned down the BSA’s request as part of that deal for permission to pull out of the earlier $650 million settlement with The Hartford. The Boy Scouts sought to withdraw from the April agreement after attorneys for abuse claimants repeatedly asserted that their clients would never vote for a reorganization plan that included it.

For the current quarter, The Hartford expects to incur a related pre-tax charge against earnings of approximately $137 million. Ranking as the No. 142 company on this year’s Fortune 500 list, The Hartford recorded revenues of more than $20 billion in 2020.

Through a separate new settlement, the Church of Jesus Christ of Latter-day Saints has agreed to pay $250 million into the fund for abuse claimants. Commonly known as the Mormon church, the denomination comprised the largest single sponsor of Boy Scout troops before ending its partnership with the BSA at the beginning of last year.

The agreements with The Hartford and the Church of Jesus Christ of Latter-day Saints are part of the BSA’s efforts to formulate a reorganization plan capable of garnering the backing of a majority of abuse victims and the bankruptcy court. Combined with an $850 million contribution from the BSA and local councils, the proposed settlements would bring the fund for abuse claimants to nearly $1.9 billion.

Attorneys are still trying to forge a settlement with the Boy Scouts’ other major insurer, Century Indemnity.

“There is still much to be done to obtain approval from the court for the BSA’s amended plan, but these settlements represent a critical step toward a global resolution,” the BSA said in a statement. “With the support of the Coalition of Abused Scouts for Justice, this plan has the overwhelming support of survivors, and the BSA continues to work with other key groups to ensure our plan has their support.”

But some parties still have major concerns. An official victims committee and law firms that separately represent hundreds of men who have filed sexual abuse claims oppose the proposed settlements. The committee has estimated the total liability exposure of Boy Scouts insurers for abuse claims at more than $100 billion.

“The only winners in this latest proposal are the Boy Scouts, their local councils, the Mormon church and The Hartford insurance company,” Michael Pfau, an attorney whose firm represents more than 1,000 abuse claimants in the bankruptcy, said in a statement. “The Boy Scouts are offering abuse survivors a fraction of what their cases are worth and the assets available to pay them.”

Based in Irving, Texas, the BSA sought bankruptcy protection in February 2020 to try to halt hundreds of individual lawsuits and create a massive compensation fund for men with molestation claims against the company. By last month, the organization was facing more than 82,000 sexual abuse claims.