Boy Scouts bankruptcy plan’s approval doubtful
Preliminary results in claimant vote fall short
DOVER, Del. – A preliminary voting report in the Boy Scouts of America bankruptcy indicates the group’s reorganization plan has failed to win the desired support from tens of thousands of men who say they were sexually abused as children.
The report, filed late Tuesday night, shows 73% of 53,888 valid ballots were cast in support of the plan, with just under 27% against. The Boy Scouts were hoping to garner at least 75% of the vote.
Debtors in bankruptcy typically need two-thirds approval from creditors for a reorganization plan, but cases involving mass tort liabilities, whether stemming from asbestos or child sexual claims, generally need a greater level of support.
A final voting report is due Jan. 17, but the initial results could spell trouble for the Boy Scouts of America’s goal of compensating survivors for decades of child sexual abuse by Scoutmasters and others while being able to emerge from bankruptcy on sound financial footing and continue the Scouting movement.
“We are encouraged by these preliminary results and are actively engaging key parties in our case with the hope of reaching additional agreements, which could potentially garner further support for the plan before confirmation,” the Boy Scouts said in a statement.
Opponents of the plan, including the official committee appointed to
represent all abuse claimants, said the vote shows the Boy Scouts’ proposal was inadequate.
“This was a poorly constructed plan driven by a group of lawyers who wanted to achieve a quick, cheap bankruptcy settlement,” said Jason Amala, an attorney whose law firm represents more than 1,000 claimants.
John Humphrey, co-chair of the official abuse claimants committee, said abuse survivors understood the plan does not adequately compensate them.
“The prospect of litigation against the BSA, its local councils, chartered organizations, and their respective insurers will not dissuade those who have spent lifetimes seeking justice,” Humphrey said in a prepared statement. “The Boy Scouts tout the Plan and the settlements as historically high. When considered from the perspective of the
individual abuse survivor, the settlements are historically low.”
Meanwhile, attorneys continue to gather information and take depositions from opposing parties in advance of a hearing to begin Feb. 22 to determine whether Judge Laura Selber Silverstein should confirm the plan.
The plan calls for the Boys Scouts and its roughly 250 local councils to contribute up to $820 million in cash and property into a fund for abuse claimants. In return, the local councils and national organization would be released from further liability for sexual abuse claims.
All told, contributions from the BSA, councils, insurers and sponsoring organizations would bring the compensation fund for abuse claimants to more than $2.69 billion, which would be the largest aggregate sexual abuse settlement in U.S. history.