In the Wake of Hundreds of Child Sexual Abuse Claims, Boy Scouts of American File Chapter 11 Bankruptcy and Force Victims to Hold Their Abuse Claims. 

On Tuesday, February 18, the Boy Scouts of America filed Chapter 11 Bankruptcy in the US Bankruptcy Court of Delaware. The purpose, according to the organization, is to allow the BSA to operate as normal while setting up a trust to pay for the hundreds of child sexual assault judgments. 

For the abuse survivors, this bankruptcy filing will mean that they will not have to relive their story in front of a jury of their peers. However, the Boy Scouts filing for bankruptcy also means they do not get the right to a jury trial. 

Sexual Abuse Claims Against the Boy Scouts

The Boy Scouts have been helping and working with children for over 100 years. The BSA is a Christian organization designed to teach young boys morals, values, and how to survive in the wilderness and life.

As wonderful as this organization has been for many young men, it has been a nightmare for others. The allegations began in 2010 when Kerry Lewis won a verdict of $18.5 million against the organization for sexual abuse.  

Mr. Lewis’ claim was the first of hundreds. It is believed that over 12,000 children were abused by Boy Scout leaders over the past 72 years. Any of these abuse incidents occurred over thirty years ago, however, there are still new abuse victims with claims of abuse as recent as last year.

The abuse claims range from charges of:

  • Fondling 
  • Showing children pornographic movies 
  • Anal and oral sex
  • And more

The reason many claims of abuse are from thirty years ago or more is in the 1990s, the Boy Scouts changed their policies of how leaders were vetted, ruling out people who had a criminal past. The main goal of this process was to keep child predators away from the children they would have been sworn to protect. 

As the verdicts for these lawsuits come in, the Boy Scouts are expected to owe between $100 and $500 million to the victims of child sexual abuse. 

Why Are Victims of Boy Scout Sex Abuse Coming Forward Now?

Since 2019, many states have issued new laws regarding time limits to file claims of child sexual abuse. Until this point, most states required children or their parents to file civil claims of child sexual abuse within a few years of the incident or from the date they turned 18. 

New laws in many states are providing unlimited time limits or time limits that extend several years or more from the victim’s 18th birthday. Many states allow victims as much as 25 to 30 years to file a claim in civil court for child sexual abuse. 

Additionally, these new laws are providing victims with a two-year period that allows anyone who has ever been sexually abused as a child to file a claim. During these two years, it does not matter how old the victim is or when the event occurred. 

According to many experts, these changes in the law reflect the time it takes many victims of child sex abuse to be comfortable telling their story or even admitting they were victimized. The average person does not report childhood sexual assault until they are in their 50s due to the intense therapy they usually will undergo to deal with the trauma. 

How Does Filing Bankruptcy Affect the Pending Lawsuits Against the Boy Scouts?

Under bankruptcy rules, civil lawsuits against an organization in bankruptcy are transferred to the bankruptcy court. The bankruptcy court will not hear the hundreds of pending sexual abuse lawsuits.

While victims will still be able to receive money for their claims, the process will be different. The bankruptcy court does not have a jury. The victims do not get to tell their stories of abuse to a jury or the judge. Once again the victims are silenced and are unable to be heard. 

This process can be devastating for abuse victims. For the past year or two, many of these victims have practiced their stories with their therapists, their attorneys, and their families. The victims have prepared for a long time to tell their story to a jury. They are not just filing a claim to get money; they are filing a claim to be heard. 

Victims of abuse are used to being ignored. They were ignored by their abusers. When they said “no” or “stop,” their abusers insisted on ignoring their cries and pleas. 

They believe their day in court is a chance to be heard once and for all. Now, this day has been ripped from them, keeping them silent once again. 

The good news is these victims will be allowed to stay anonymous in the court filings. The victims now become creditors in the bankruptcy petition. The typical rule in bankruptcy is to publicly list all creditors. However, the Boy Scouts petition the bankruptcy court to allow the victims to remain anonymous, protecting their privacy as victims of child sexual abuse. 

Will the Bankruptcy Filing Affect the Amount of the Judgments?

Now that the Boy Scouts have filed for bankruptcy, the payouts for the pending lawsuits will be based on the assets the boy scouts have. As part of the Chapter 11 filing, the Boy Scouts have set up a Victims Compensation Trust. This Trust will reportedly hold $100 to $500 million to help pay the victims' claims. 

The Boy Scouts also have insurance, which they believe will help pay the victims.

There are three categories of lawsuits. They include:

  • Settled lawsuits with unpaid judgments
  • Filed lawsuits pending in court
  • Unfiled lawsuits 

The victims who have litigation in any of these three categories will become creditors in the bankruptcy filing. Each claim will be reviewed by a third party and rated. This rating helps determine the percentage of the judgment that will be paid through the bankruptcy. 

It is likely the settlements paid through the bankruptcy court will be much smaller than the awarded judgments. Of course, the bankruptcy court decision can be appealed. However, it is not likely the appeals will result in overturning the court-approved plan of reorganization or the settlement awards.

Will the Boy Scouts Be Forced to End Operations?

The goal of Chapter 11 is to reorganize your business while you maintain operations. The Boy Scouts are hoping to do just that. 

However, as claims come forward for sexual abuse and other creditor issues. They may learn they do not have enough assets to stay open and pay the claims. At that point, they will need to start selling assets. 

The local councils may remain open and operating. However, if they do not have a national organization attached, they may be forced to close as well. 

The plan for reorganization has yet to be approved by the court. Once it is approved, the real work begins of determining who is a creditor and the debt of the organization. It will be some time before the public knows the fate of the Boy Scouts of America. Even more importantly, it will be some time before the victims get the compensation they truly deserve. 

If you are or your loved one is a victim of sexual assault at the hands of the Boy Scouts or any other organization, the experienced sexual harassment attorneys and former sex-crimes prosecutors at the Derek Smith Law Group can help.

Contact us today at (800) 807-2209 for your free consultation.

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