Bankruptcy for the Boy Scouts of America – Why?
The Boy Scouts of America have officially filed bankruptcy due to years of sexual abuse allegations. They filed Chapter 11 to keep their doors open and pay off hundreds of lawsuits, at the same time, manage their finances and rebuild trust. A trust fund has been set in place with a time limit to come forth on any claims. After the closing date, no more past claims will be able to resurface.
Lawyers say this is the most complicated case of bankruptcy in American history, where a century-old organization has raised questions on the future of the Boy Scouts of America. Local councils have been impacted across the country, and it has left a bad taste for everyone who might have been interested in joining.
Inside the petition for bankruptcy, there has been $1 to $10 billion in assets reported and $500 million to $1 billion in liabilities. Roger Mosby, the president and chief executive of the Boy Scouts of America, stated, “The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting.”
Mosby added, “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process with the proposed Trust structure will provide equitable compensation to all victims while maintaining the BSA’s important mission.”
The Boy Scouts of America is over 110 years old in its establishment, and it remains the most significant youth group in the US. It was named an “iconic but fading symbol of American culture.” The memberships fell over 26 percent since the allegations were brought to light.
Over the last decade, the Church of Jesus Christ of Latter-day Saints has removed their partnership with the youth group, and the busy lifestyles of both parents and children have made it challenging to recruit new blood into the organization. Investigations, the media, and lawsuits were the closing factors in the decline of recruits.
The Scouts hired their own investigator and came up with these outrageous numbers from 1946 to 2016. It was reported there were 12,254 victims named of sexual abuse and 7,819 perpetrators within the organization. Due to these staggering numbers, the statute of limitations has been overhauled for lawyers to take on these cases. Hundreds have been filed across the country with most in Pennsylvania and New York.
Michael Pfau is a lawyer who represents over 300 of these victims stated, “In a way, this is an acknowledgment finally on the part of the Boy Scouts that they had this enormous problem and the problem is so large that they can’t deal with it themselves. It is a bit of a day of reckoning for the Boy Scouts.”
Pfau also added, “But a bankruptcy filing may also limit alleged victims’ ability to have their story heard in court and their claim ultimately decided by a jury of their peers.”
Pamela Foohey, an associate law professor at Indiana University who specializes in bankruptcy issues, stated the alleged victims could have a voice to negotiate with the insurance companies and the BSA to determine the compensation based on the assets.
Foohey also said, “But given the deadline for claims, which could come within months of the filing, the bankruptcy process might require alleged victims to come forward before they feel ready to do so. If you’re not ready to come forward by then… then you do lose your claim, and you lose your voice. That’s part of why bankruptcy is useful for the Boy Scouts. It cuts off the claims.”
Jim Turley, national chair of the Boy Scouts of America, sent out an open letter which is encouraging any and all victims who feel they were violated to come forward, file their claims, and maybe receive compensation, provided their case is legit.
The letter reads in part, “We will provide clear notices about how to do so. I want you to know that we believe you, we believe in compensating you, and we have programs in place to pay for counseling for you and your family by a provider of your choice.”
Turley also wrote, in the beginning, his heartfelt sorrow. “I am also outraged that there were times when volunteers and employees ignored our procedures or forgave transgressions that are unforgivable. In some cases, this led to tragic acts of abuse. While those instances were limited, they mean we didn’t do enough to protect the children in our care to protect you.”