The Boy Scouts of America submitted a bankruptcy reorganization plan this week that envisions continued operations of its local troops and national adventure camps but leaves many unanswered questions about how it will resolve tens of thousands of sexual abuse claims by former Boy Scouts.
The plan was filed in Delaware bankruptcy court, even though the BSA remains in intense negotiations with insurers who face substantial exposure for sexual abuse claims, and with the official committee representing abuse victims.
The plan calls for a $300 million contribution from the Boy Scouts' 250-odd local councils into a trust for abuse victims, although the form and timing of those contributions remain up in the air. The Boy Scouts also say any unrestricted cash above the $75 million the organization claims it will need for operations when it emerges from bankruptcy will go into the trust fund.
The BSA also has agreed to contribute its collection of Norman Rockwell paintings to the fund, and to sell a warehouse facility in North Carolina, a Scouting University facility in Texas, and rights to oil and gas interests on properties in 17 states.
"The plan demonstrates that considerable progress has been made as we continue to work with all parties toward achieving our strategy to provide equitable compensation for victims and address our other financial obligations so that we can continue to serve youth for years to come," the Boy Scouts said in a prepared statement. "In the coming months, supplements to the plan will include a more detailed breakdown of the process to compensate survivors and more details about how local councils will support this effort."
Jared Pickens, the CEO and scout executive of the Cherokee Area Council that oversees Boy Scout activities in 11 counties in Southeast Tennessee and Northwest Georgia, said the local council "remains as committed as ever to delivering Scouting's unparalleled experiences to young people throughout our communities."
Pickens said despite the challenge of the sex abuse claims and the coronavirus pandemic, 40 young people earned the rank of Eagle Scout in 2020 in the Cherokee Council by contributing nearly 10,000 hours of community service.
"Our Outdoor programming is more important, relevant, and safe than ever," he said. "Over 1,800 people participated safely in Council and District-led programs. Countless more participated in virtual, in-person, and hybrid Unit activities and meetings."
Pickens said the Cherokee Area Council has not filed for bankruptcy and will continue to have a voice in the BSA's Chapter 11 process through the Ad Hoc Committee of Local Councils in working toward a global resolution that will fund a Trust to compensate victims.
But Paul Mones, an attorney representing hundreds of former Scouts, called the plan "woefully and tragically inadequate."
"The problem is that the Boy Scouts are not willing to dig deep enough for the deep pain they caused," he said.
"They are shifting the responsibility to the insurance companies, creating a situation for the survivors to engage in obviously protracted litigation to obtain the just compensation they deserve," Mones added. "The BSA basically wants to walk away unscathed from this."
The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection last February in an effort to halt hundreds of individual lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.
The councils, which run day-to-day operations for local troops, are not listed as debtors in the bankruptcy and are considered by the Boy Scouts to be legally separate entities, even though they share insurance policies and are considered "related parties" in the bankruptcy case.
Attorneys for abuse victims made it clear from the onset of the bankruptcy that they would go after campsites and other properties and assets owned by councils to contribute to a settlement fund.
"I think the Boy Scouts have a responsibility here to make sure those men are taken care of," Mones said.
The plan does not reflect any agreements with BSA insurers or estimates of their potential liabilities but does state that the rights to policies and insurance proceeds would go into the trust.
Lawyers for the BSA's insurance companies have argued that they should be allowed to serve document requests on 1,400 people who have filed sexual abuse claims and to question scores of them under oath in an effort to determine whether there has been widespread fraud in the claims process. The judge has yet to rule on that request.
Tancred Schiavoni, an attorney for one of the BSA insurers, Century Indemnity, said that his client supports a fair resolution for abuse victims, "but this plan doesn't get us there."
"The court needs to first implement a process to root out the bad claims generated by for-profit claims aggregators and misleading advertising campaigns," Schiavoni said in a prepared statement.
More than 95,000 sexual abuse claims have been filed in the bankruptcy case.