The Boy Scouts of America (BSA) on Thursday reached an $850 million settlement with attorneys representing some 60,000 victims of child sex abuse seeking compensation through the nonprofit’s bankruptcy proceedings.
According to a filing with the U.S. Bankruptcy Court in Delaware, insurance rights will be signed over to a trust that would handle the abuse claims and distribution of payments to the tens of thousands of sex abuse victims.
The settlement with the Coalition of Abused Scouts for Justice and two other groups “ensures we have the overwhelming support of survivors” to emerge from bankruptcy, the Irving, Texas-based organization said.
“Bringing these groups together marks a significant milestone … as the BSA works toward our dual imperatives of equitably compensating survivors of abuse and preserving the mission of scouting,” the 111-year-old organization said in a statement.
Thursday’s settlement requires a judge’s approval and could face opposition from insurers that would be on the hook for payouts.
In a court filing, affiliates of American International Group Inc, Chubb Ltd, Travelers Cos, and other insurers said the Boy Scouts excluded them from negotiations and gave victims’ lawyers too much of a say in crafting a settlement.
The BSA has approximately 2.2 million youth members between the ages of 5 and 21 and approximately 800,000 volunteers in local councils throughout the United States and its territories, according to the organization’s website. More than 130 million young men and women have participated in the BSA’s youth programs since its founding in 1910.
Last year, the BSA sought bankruptcy protection as its finances fell apart, largely due to the mounting sexual abuse claims dating back several decades, from men who were allegedly violated as youngsters by Scout leaders.
Ken Rothweiler, an attorney at Eisenberg Rothweiler in Philadelphia, who represented some 16,800 victims, welcomed the settlement.
“I am pleased that both the BSA and their local councils have stepped up to be the first to compensate the survivors,” Rothweiler said in a statement Thursday. “We will now negotiate with the insurers and sponsoring and chartering organizations who have billions of dollars in legal exposure, of which a substantial portion is necessary to fairly compensate the survivors.”
The Boy Scouts said in a statement Thursday that the agreement will help local councils make their contributions to the Trust without additional drain on their assets, and will allow them to move forward with the national organization toward emergence from bankruptcy.
“There is still much to be done to obtain approval from the Court to solicit survivors to vote for the BSA’s amended Plan of Reorganization,” the group said. “However, with this encouraging and significant step forward, the BSA is wholeheartedly committed to working toward a global resolution. Our intention is to seek confirmation of the Plan this summer and emerge from bankruptcy late this year.”
Reuters contributed to this report.