US judge blocks $850 million sexual assault settlement in Boy Scouts | Courts News
The ruling allows Boy Scouts, who have been hit by a flood of lawsuits last year, to move forward with a proposed reorganization plan.
Boy Scouts of America can enter into a pivotal $850 million agreement to settle thousands of child sexual abuse claims, after it has been approved by the US Bankruptcy Court.
Thursday’s ruling by Judge Lori Silber Silverstein of Delaware will enable Boy Scouts to move forward with a proposed reorganization plan that would allow the group to emerge from bankruptcy by the end of the year.
Founded in 1910, the Boy Scouts filed for Chapter 11 bankruptcy protection in February 2020 after experiencing a flood of sexual assault lawsuits.
After three days of testimony and arguments, the judge granted BSA’s request to enter into an agreement involving 250 local Boy Scouts and attorneys representing 70,000 men who said they had been sexually abused when they were young.
The agreement calls for scouts and local councils to contribute $850 million to the Abuse Claimants Fund.
The agreement was opposed by insurance companies that issued policies to Boy Scouts and local councils, attorneys representing thousands of other abuse victims, and various church denominations that sponsored local Scout forces.
The judge refused to grant a request to allow Boy Scouts to pay millions of dollars in legal fees and expenses for attorneys appointed by law firms representing tens of thousands of abuse claimants.
Silverstein rejected the BSA’s request under the permission agreement to withdraw from the April agreement under which insurer The Hartford will pay $650 million in the fund to abuse claimants in exchange for exempting them from any further liability.
Under the agreement, Boy Scouts will contribute up to $250 million in cash and property to a fund for victims of child sexual abuse. Local councils, which run day-to-day operations for the Scout Troops, will contribute $600 million.
In addition, national organizations and local councils will transfer their rights to Boy Scouts insurance policies to the Victims Fund. In return, they will be relieved of future liability for abuse claims.
The judge rejected two controversial clauses in the agreement that opponents had highlighted.
Unless the Scouts come to a solution with the insurance companies, they are likely to continue fighting over the eventual bankruptcy plan.