The Boy Scouts' bankruptcy filing freezes existing litigation and could set a time limit for victims to come forward to receive compensation.
- The Boy Scouts filed for bankruptcy on Tuesday following a new wave of lawsuits alleging sexual abuse.
- Founded in 1910, the Boy Scouts have played a fundamental role in many Americans' childhood.
- But the organization has grappled with sexual-abuse allegations in its ranks for decades. It internally documented thousands of men suspected or known to have preyed on Scouts.
- Lawyers around the country say they have gathered hundreds of new clients who say they were abused in the Scouts, many of them decades ago.
- But a bankruptcy filing would freeze all existing litigation and could set a time limit for victims to come forward to receive compensation.
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Facing a wave of lawsuits and decades-old allegations of sexual abuse, the Boy Scouts of America filed for Chapter 11 bankruptcy on Tuesday, complicating the path to justice for the thousands of former Scouts who say they were abused during their time in the storied American institution.
The organization filed just after midnight in the US Bankruptcy Court in Delaware, ending months of speculation that it would take such an action. The filing covers the national organization but excludes its local councils. These entities operate troops and hold about 70% of the organization's wealth, a Wall Street Journal analysis found.
The Boy Scouts have experienced over a decade of tumult from declining membership, the dissolution of key partnerships, controversy over their decision to allow gay and female members, and scrutiny over the extent to which child predators operated within their ranks.
The latter is perhaps the most pressing issue for the Boy Scouts. Over the past year, lawyers across the US gathered new allegations by former Scouts who say they were sexually abused and filed lawsuits on their behalf.
At the same time, statute-of-limitations reforms in some states allowed accusers to bring cases that had been barred, opening a legal floodgate that posed a significant threat to the Scouts.
Past lawsuits brought by abuse survivors had cost the Scouts millions. In 2010, a Portland, Oregon, jury awarded $18.5 million in punitive damages to a former Boy Scout in a landmark case.
"The fact is that predators harmed innocent children in Scouting programs, and for this I am deeply sorry," Jim Turley, the national chair of the Boy Scouts of America, wrote in an open letter urging survivors to come forward with claims.
In a press release issued after the filing, the Boy Scouts said they were pursuing Chapter 11 bankruptcy to "equitably compensate victims who were harmed during their time in Scouting and continue carrying out its mission for years to come." The Boy Scouts also pledged to set up a "Victims Compensation Trust" for accusers.
Chapter 11 bankruptcies are typically used to reorganize businesses or institutions. Though lawyers representing accusers did not believe bankruptcy spelled the end of the Boy Scouts, the organization could suffer reputational as well as financial consequences as a result of the filing.
"The Boy Scouts have been a cornerstone of the American identity for decades," said Paul Mones, who has represented Boy Scouts accusers for years and says he has "hundreds" of clients. "The question," he added, was, "Will it have the same meaning after the Boy Scouts file bankruptcy?"
The Boy Scouts said Scouting programs and troop activities would continue during the bankruptcy.
Bankruptcy will make it harder for abuse survivors to seek justice
The Boy Scouts' decision to file for bankruptcy both clarifies and complicates the path forward for people who say they were abused.
The filing will freeze any ongoing litigation against the Scouts and most likely create a "bar date," or deadline by which abuse victims could come forward to claim compensation. The Boy Scouts are facing nearly 300 sexual-abuse lawsuits, according to The Wall Street Journal.
"That is one of the reasons I think our clients will be angry, because it takes away a degree of control," the Seattle-based attorney Michael Pfau, who says he represents 300 Boy Scout abuse survivors in 40 states, told Insider. "The most important legal tool that the abuse survivor has is the right to a jury trial in his or her home state. Now, not having that and the right to tell their story, I think that's why there will be some anger."
At the same time, the bankruptcy process will create a system for survivors to come forward and claim some form of compensation, Pfau said. On Tuesday night, the Boy Scouts pledged to create a Victims Compensation Trust as part of their bankruptcy process.
But that compensation would most likely be lower than what would be awarded in a jury trial, said Ken Rothweiler, an attorney with a group of lawyers called Abused in Scouting that has gathered about 1,800 clients over the past year. One of Rothweiler's associates, the attorney Tim Kosnoff, said last year that his group would be open to working with the Boy Scouts during a bankruptcy proceeding.
But for some victims, compensation was secondary to their ultimate goal of speaking out: getting the Boy Scouts to acknowledge that children were harmed under their care and forcing them to do something about it.
David, a former Boy Scout who is a client of Pfau's, sued the Boy Scouts as one of four plaintiffs in a lawsuit filed in New Jersey in January. David, who asked to be identified by only his first name, said he was assaulted by an assistant scoutmaster in the 1970s, beginning at age 12 or 13, when he was a Scout in Amarillo, Texas.
David alleges that the assistant scoutmaster once fondled him during an overnight trip, sexually abused him and other boys, and frequently behaved inappropriately with other Scouts in the troop.
"I don't really care about the Boy Scouts, if they go bankrupt," David told Insider. "Whatever it takes to stop this from happening more."
"To me, the Boy Scouts, they can come and go, I don't give a damn," he said. "I don't care about any of the money, I just want to make sure this stops."
A long history of abuse allegations
The Boy Scouts' problem with sexual abuse has been no secret — least of all to the organization itself. Over the past decade, lawsuits brought by victims, along with investigations by news outlets like the Los Angeles Times, revealed thousands of the Boy Scouts' internal documents known as the "ineligible-volunteer files," which recorded the names of Boy Scout employees and volunteers who had been accused — and, sometimes, found guilty — of assaulting children.
Critics of the Boy Scouts, such as the lawyers with Abused in Scouting, argue those records are incomplete and that thousands more children were most likely assaulted than had previously been known. The group has uncovered hundreds of suspects who were not listed in the publicly available ineligible-volunteer files.
An investigator hired by the Scouts revealed in January during sworn testimony in an unrelated case that her team had identified 12,254 victims and 7,819 perpetrators in internal documents from 1946 through 2016.
Bankruptcy has the potential to bring even more cases to light if a "bar date" for survivors to come forward is set. Abused in Scouting is preparing to receive even more clients, Rothweiler said.
"I think the bankruptcy is going to unmask the sexual abuse issue in ways we've never seen before, because we're going to see men from all over the country come forward," Mones said.
"The question is going to be," he continued, "when the sexual-abuse problem of the Boy Scouts is shown in the full sunlight, will moms and dads in small towns across America make the decision, 'I don't want my son to join'?"