Boy Scouts’ $2.4 billion bankruptcy plan upheld by judge
Published 5:29 pm Tuesday, March 28, 2023
A $2.4 billion bankruptcy plan for the Boy Scouts of America has been upheld by a federal judge, clearing an important hurdle in the legal challenge by certain insurance companies and dissenting sex abuse survivors.
The plan would let the Texas–based organization keep operating while it compensates tens of thousands of men who say they were sexually abused as children while involved in Scouting.
The ruling released Tuesday in U.S. District Court in Delaware rejected arguments that the bankruptcy plan wasn’t proposed in good faith and improperly strips insurers and survivors of their rights.
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More than 80,000 men have filed claims saying they were abused as children by troop leaders around the country. Plan opponents say the staggering number of claims, when combined with other factors, suggest the bankruptcy process was manipulated.
Judge Richard Andrews said he found no fault with the plan’s initial approval by a federal bankruptcy judge in September, although he agreed with the previous judge that it was “an extraordinary case by any measure.”
“The appellants have failed to put forth evidence that would demonstrate clear error in the bankruptcy court’s careful findings of facts,” the judge wrote.
A spokesperson for lawyers representing several non–settling insurance companies had no immediate comment, but attorneys have previously suggested the case could eventually reach the U.S. Supreme Court.
The Boy Scouts issued a statement describing the ruling as “a pivotal milestone” that “solidifies a path forward for both survivors and Scouting.”
“We look forward to the organization’s exit from bankruptcy in the near future and firmly believe that the mission of Scouting will be preserved for future generations,” the statement said.