Future liability releases at center of Boy Scouts bankruptcy

DOVER, Del. (AP) — Protecting local Boy Scouts of America councils and troop sponsoring organizations from future liability for child sex abuse claims is critical to the national group’s reorganization plan, BSA attorneys told a Delaware bankruptcy judge Tuesday.

Attorneys opposing the plan countered that liability releases for non-debtor third parties are neither fair nor necessary, and that they infringe on the rights of abuse survivors to seek compensation for their abuse.

The Boy Scouts, based in Irving, Texas, petitioned for bankruptcy protection in February 2020, seeking to halt hundreds of individual lawsuits and create a settlement trust for abuse victims. Although the organization faced about 275 lawsuits at the time, more than 82,000 sexual abuse claims have been filed in the bankruptcy case.

The reorganization plan calls for the Boys Scouts and its 250 local councils, along with settling insurance companies and troop sponsoring organizations, to contribute some $2.6 billion in cash and property and assign their insurance rights to a settlement trust fund for abuse victims. More than half that money would come from the BSA’s two largest insurers, Century Indemnity Co. and The Hartford. Those companies would contribute $800 million and $787 million, respectively.

In exchange, the parties contributing to the settlement trust would be released from further liability for sexual abuse claims dating back decades.

The local BSA councils are not debtors in the bankruptcy, but Boy Scouts attorney Jessica Lauria argued that they are inextricably intertwined with the national organization and deserve to be protected from future lawsuits in exchange for contributing to the compensation fund.

“There can be no doubt that there is an identity of interests, and frankly an...