DOVER, Del. — A Delaware judge ruled Thursday that the Boy Scouts of America can enter into a pivotal $850 million agreement that the organization hopes to use as a springboard to emerging from bankruptcy later this year, but rejected two key provisions of the deal. Following three days of testimony and arguments, the judge granted the BSA's request to enter into an agreement involving the national Boy Scouts organization, roughly 250 local Boy Scout councils, and attorneys representing some 70,000 men who say they were sexually abused as youngsters decades ago while engaged in Boy Scout-related activities. The agreement calls for the Boy Scouts and local councils to contribute $850 million into a fund for abuse claimants. The agreement was opposed by insurers who issued policies to the Boy Scouts and local councils, attorneys representing thousands of other abuse victims, and various church denominations that have sponsored local Boy Scout troops. It was not immediately clear how the judge's ruling will affect the future of the bankruptcy case, given that she rejected two significant provisions in the agreement. While ruling that BSA officials exercised proper business judgment as required under the law in entering into the agreement, the judge refused to grant a request that the Boy Scouts be allowed to pay millions of dollars in legal fees and expenses of attorneys hired by law firms that represent tens of thousands of abuse claimants. She also denied the BSA's request under the agreement for permission to withdraw from an April agreement in which insurance company The Hartford would pay $650 million into the fund for abuse claimants in exchange for being released from any further liability. The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection in February 2020 in an effort to halt hundreds of individual lawsuits and create a huge compensation fund for thousands of men who were molested as youngsters by scoutmasters or other leaders. Although the organization was facing 275 lawsuits at the time of the filing, it is now facing some 82,500 sexual abuse claims in the bankruptcy case. Under the agreement, the Boy Scouts would contribute up to $250 million in cash and property to a fund for victims of child sexual abuse. The local councils, which run day-to-day operations for Boy Scout troops, would contribute $600 million. In addition, the national organization and local councils would transfer their rights to Boy Scout insurance policies to the victims fund. In return, they would be released from future liability for abuse claims. Opponents of the deal argued that BSA officials failed to fully inform themselves or exercise proper business judgment in entering into the agreement. They noted that the Boy Scouts board of directors never adopted a resolution approving the agreement, and that decision-making authority was delegated to an executive committee and a handful of people on a bankruptcy task force.
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Article Link: https://www.npr.org/2021/08/19/1029448274/boy-scouts-bankruptcy-judge-conditional-approval
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