What Chapter 11 Bankruptcy Means for the Sexual Abuse Victims of the Boy Scouts of America

The news that the Boy Scouts of America has decided to file for Chapter 11 bankruptcy has elicited an array of responses from the people who have been the most impacted by the organization. Much of this response has been confusion over what it means for the victims: are people still able to come forward and file claims and are there any funds left for compensation?

The short answers to these questions are both yes. Victims are still able to come forward, and bankruptcy does not mean that the organization is unable to pay the damages owed. Chapter 11 bankruptcy suggests that the Boy Scouts of America is admitting that they need the assistance of a bankruptcy judge to help them reorganize their funds.

Many organizations facing large numbers of abuse lawsuits have filed for Chapter 11 bankruptcy, including regional chapters of the Catholic church. While this helps ensure the organization faces consequences for their actions, it is also a way for the organization to mitigate the number of lawsuits coming their way.

Why File for Bankruptcy?

Organizations file for bankruptcy when they aren’t confident that they can repay all of their debts with their ongoing asset-management system. The way they’re functioning is not financially sustainable.

With the number of individual and class action lawsuits the Boy Scouts of America is facing, the organization was likely worried about their ability to continue. With the help of a bankruptcy judge, the Boy Scouts of America will be able to determine which assets can be liquidated and how to evenly distribute compensation to victims of abuse.

The more insidious reason to file for bankruptcy is the “bar date” on filing claims as a victim. In bankruptcy cases the judge will often set a date, after which victims will no longer be able to file claims. This gives victims an ultimatum: speak now or forever hold your peace.

Forcing victims to step forward before they are ready can be damaging to their recovery process and is just as likely to cause them to step away from seeking compensation. This would limit the amount the Boy Scouts of America will owe by limiting the number of victims who get to be heard.

Is the Boy Scouts of America Running Out of Funds?

No. The Boy Scouts of America have a large amount of assets. In their petition to file for bankruptcy, the organization reports to have between $1 billion-$10 billion, and between $0.5 billion-$1 billion in liabilities. In addition to their capital and real property assets, the Boy Scouts of America also have insurance to compensate survivors. The combination of assets and insurance should be enough to provide compensation for those filing claims against the organization.

Beyond the national organizations bankruptcy, district-level troops have been reassured that they won’t feel any financial stress. Each troop operates on its own budget, independent of the national organization.

Will We See Any Substantial Changes to the Way the Organization is Run?

The Boy Scouts of America have already implemented training that all adult volunteers are required to take, emphasizing what is and is not appropriate as well as how to recognize and prevent abusive actions by other members of the organization. All adult leaders are also required to provide references and undergo a criminal background check before working with any of the children.

When predators slip through these protections it’s a failure of the system. While the organization has increased requirements for how many screened adults must be present during activities, they are to be held accountable when one or more of those adults is dangerous and hurts the youths in their care.

Can I Still File a Claim?

Yes. If you or a loved one has been sexually abused by a member of the Boy Scouts of America then you should strongly consider filing your claim now. While the deadline has not been set yet, it is likely to be set soon.

If you would like to learn more about your options as a survivor, please contact the lawyers at Berman & Simmons. Our attorneys have experience handling child sexual abuse cases and understand how to hold institutions accountable. We are proud to fight for you.

COVID-19: Our offices are closed to the public, but OUR WORK CONTINUES and we intend to stay fully operational. We look forward to speaking with you!

Read More
X