Scouts file Chapter 11 over abuse lawsuits
Victim compensation may surpass $1 billion
Barraged by hundreds of sexabuse lawsuits, the Boy Scouts of America filed for bankruptcy protection Tuesday in hopes of working out a potentially mammoth victim compensation plan that will allow the hallowed, 110-year-old organization to carry on.
The Chapter 11 filing in federal bankruptcy court in Wilmington, Delaware, sets in motion what could be one of the biggest, most complex bankruptcies ever seen. Scores of lawyers are seeking settlements on behalf of several thousand men who say they were molested as scouts by scoutmasters or other leaders decades ago but are only now eligible to sue because of recent changes in their states’ statute-of-limitations laws.
By going to bankruptcy court, the Scouts can put those lawsuits on hold for now. But ultimately they could be forced to sell off some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation fund that could surpass a billion dollars.
“Scouting programs will continue throughout this process and for many years to come,” said Evan Roberts, a spokesman for the Scouts. “Local councils are not filing for bankruptcy because they are legally separate and distinct organizations.”
The bankruptcy represents a painful turn for an organization that has been a pillar of American civic life for generations and a training ground for future leaders. Achieving the rank of Eagle Scout has long been a proud accomplishment that politicians, business leaders, astronauts and others put on their resumes.
The Boy Scouts’ finances have been strained in recent years by declining membership and sex-abuse settlements.
The number of youths taking part in scouting has dropped below 2 million, down from more than 4 million in peak years of the 1970s. The organization has tried to counter the decline by admitting girls, but its membership rolls took a big hit Jan. 1 when The Church of Jesus Christ of Latter-day Saints — for decades a major sponsor of Boy Scout units — cut ties and withdrew more than 400,000 scouts in favor of programs of its own.
The financial outlook worsened last year after New York, Arizona, New Jersey and California passed laws making it easier for victims of abuse to file claims. Lawyers across the U.S. have been signing up clients by the hundreds to sue the Boy Scouts.