Overview of BSA Chapter 11 Bankruptcy
On February 18, 2020, the national organization of the Boy Scouts of America (the BSA) filed a voluntary petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The bankruptcy proceeding involves the Boy Scouts of America which is a national organization. The local scouting councils are each legally independent organizations, separate and distinct from the national organization. While the local councils are not part of the Chapter 11 proceeding, each local council will have an opportunity to contribute to the Victims Compensation Trust.
The reason for the bankruptcy filing can be tracked to a 2010 trial in Portland, Oregon where the plaintiff was awarded $20 million in damages for sexual abuse by a scout leader. More importantly, the Portland lawsuit forced the release of the BSA perversion files which showed the immense scope of reported sexual abuse within the Boy Scouts organization. The perversion files revealed BSA was well aware of decades of sexual abuse but chose to keep the reports a secret and protect the organization rather the young boys entrusted to their care.
According to the BSA, approximately 90% of pending and asserted abuse claims against the BSA relate to abuse that occurred more than 30 years ago.
November 16 Bar Date Allows Short Window to File
Abuse victims only have until November 16, 2020 at 5:00 p.m. (Eastern Standard Time) to file a claim. The Bankruptcy Court has approved a 12 page Proof of Claim form for sexual abuse survivors. Once completed Proof of Claim form can be filed electronically on the BSA Restructuring website or by mail care of Omni Agent Solutions. Forms cannot be submitted by fax or email.
Victims Compensation Trust Fund
Through the Chapter 11 process, a trust has been created to provide compensation to victims of sexual abuse who file a claim by the November 16 Bar Date. Victims of past sexual abuse are encouraged to file a claim for compensation through the bankruptcy process.
According to BSA’s restructuring website, the organization has two objectives for the Chapter 11 restructuring.
- BSA has a social and moral responsibility to equitably compensate all victims who were abused during their time in Scouting
- BSA has a duty to future Scouts to carry out the organization’s mission for years to come
In a statement earlier this year, Boy Scouts of America’s Chief Executive Officer, Roger Mosby, said BSA “cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting.” Mosby believes the bankruptcy process will provide equitable compensation to all victims while maintaining the organization’s mission.
According to Bloomberg, the Boy Scouts are one of several non-profit groups to go bankrupt in recent years after being accused of turning a blind eye to widespread sexual abuse of children in their care. USA Gymnastics and more than 20 dioceses of the Catholic Church have sought court protection after facing claims of sexual abuse.
Will victim’s information be kept confidential?
Yes, subject to certain limitations, personal information can be kept confidential. The Bankruptcy Court has set up a procedure to protect the privacy of sexual abuse survivors.
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About Case Works: Case Works is the industry leader in providing case development support for mass tort law firms across the nation. We can help you move cases from intake to ready to file without overburdening your team or expanding your staff. Give us a call and let us show you how our Case Ready™️ system can help you scale your mass tort practice and grow your firm’s bottom line.
