Boy Scouts Announce Plans to File for Bankruptcy Protection

Facing sex abuse lawsuits and a drop in membership, the Boy Scouts of America announced that they plan to file for bankruptcy protection in federal court.

Also driving the decision are likely reforms of the statutes of limitations in California, New York, New Jersey, Pennsylvania, and other states that will allow victims of past sexual abuse by Boy Scout volunteers to bring claims against BSA.

Leaders of the Boy Scouts, one of the country’s largest youth organizations, hired law firm Sidley Austin LLP for assistance with a possible Chapter 11 bankruptcy filing, according to news reports. Chapter 11 would reorganize BSA’s assets to allow the organization to pay off claims; not put Boy Scouts out of business.

According to its latest publicly available financial statement, BSA has net assets of over $900 million after accounting for liabilities. This includes a claims fund of over $160 million set aside for paying sex abuse and other claims, over and above the insurance BSA has that covers such claims.

The Boy Scouts currently have more than 2.3 million youth members. This year, the Mormon Church, formerly one of its largest sponsors, said it would several all ties with Boy Scouts. The Mormon Church said it would develop its own program for young men.

The Boy Scouts have experienced tough times in recent years. They attempted to increase their membership by inviting girls to join, which proved to be a public relations debacle. In November, the Girl Scouts filed a trademark lawsuit against BSA, saying its push for girls to join caused confusion and led to instances in which parents mistakenly signed their children up for Boy Scouts programs.

The Boy Scouts has as sad a history with child sex abuse as the Catholic Church. The Scouts kept Ineligible Volunteer Files on accused child molesters since at least 1920, although BSA kept these files secret from local troops and Scout families. Many of the existing “IV Files” are available in an online database.    

The Boy Scouts of America bankruptcy could happen any time in the next few months. A BSA bankruptcy is not necessarily bad news for victims of abuse in Scouting. In fact, it could be good news. Bankruptcy requires a different strategy for abuse survivors bringing claims. But as we know from representing survivors in Catholic bankruptcies, bankruptcy can bring resolution and justice for victims of past abuse.

If you or someone you know was sexually abused or exploited in the Boy Scouts and you want more information, please call us at 503-616-5007 or email us at info@dumaslawgroup.com.

Dumas Law Group has law offices in Portland, Oregon and serves clients in Oregon, Washington, Idaho, and other states.

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