Boy Scouts Agree to $850 Million Settlement Over Abuse Claims

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U.S.|Boy Scouts Agree to $850 Million Settlement Over Abuse Claims

https://www.nytimes.com/2021/07/02/us/boy-scouts-of-america-sexual-abuse-settlement.html

Under an agreement one lawyer described as “the tip of the iceberg,” the organization would pay tens of thousands of people who said they had been sexually abused over several decades.

The legal costs associated with the allegations led the Boys Scouts organization to file for bankruptcy.
Credit...LM Otero/Associated Press

July 2, 2021Updated 5:27 p.m. ET

The Boy Scouts of America reached an $850 million settlement agreement on Thursday with tens of thousands of people who said they were sexually abused by scout leaders or members over several decades.

Kenneth M. Rothweiler, the lawyer who represents the largest group of claimants — about 16,800 — said in a statement that the agreement would be “the largest settlement of child sexual abuse claims in United States history.”

In an interview on Friday, he added that the claimants could expect billions more in payouts from insurance companies and organizations that have sponsored the Boy Scouts.

“It really is the tip of the iceberg,” Mr. Rothweiler said of the $850 million. “It’s really just a small down payment on what we will ultimately be able to deliver to the survivors.”

In February 2020, the organization, facing an avalanche of sex-abuse claims that now total about 84,000 cases, filed for bankruptcy protection amid rising legal costs associated with the allegations, signaling the group’s intent to establish a trust to compensate victims.

According to a motion filed in court on Thursday, the agreement has support from representatives of about 60,000 of the abuse survivors. If approved by a judge, the settlement would be distributed in different amounts based on individual cases, Mr. Rothweiler said.

A clerk with the U.S. Bankruptcy Court for the District of Delaware said that Judge Laurie Selber Silverstein, who is overseeing the case, did not have any comments.

According to a statement, the Boy Scouts of America’s national organization agreed to contribute $250 million to the trust. The brunt of the settlement would be paid by the approximately 250 local councils, who were asked to contribute $500 million in cash and properties. Local councils can also add another $100 million, funded with contributions that would have originally gone to a pension plan for former executives and employees, which the Scouts say is overfunded.

“This significant step toward a global resolution benefits the entire Scouting community,” the statement said.

“This agreement will help local councils make their contributions to the trust without additional drain on their assets,” the organization added, “and will allow them to move forward with the national organization toward emergence from bankruptcy.”

The Scouts’ enrollment dropped 62 percent since 2019, and some local councils might consolidate in the next year, in part to help pay for their contributions to the settlement, according to the organization.

If approved, the $250 million from the national organization is expected to be paid in a mix of cash, property and other assets, including a collection of Norman Rockwell paintings that would be put up for auction, Mr. Rothweiler said.

Founded in 1910, the Boy Scouts grew to become an organization that shaped the values of millions of children. Abuse allegations began surfacing decades ago, but the organization was able to keep the reports largely outside of public view until lawsuits helped expose files detailing a long history of abuse.

The organization has estimated the likely payout potential of the abuse claims at a range of $2.4 billion to $7.1 billion, according to records in the bankruptcy case, while a committee representing victims has valued the total claims at over $100 billion.

The case is many magnitudes larger than other recent sex-abuse cases, including those filed against the Roman Catholic Church and U.S.A. Gymnastics. It has been further complicated by battles over how much local Scout councils, which hold many valuable assets, should be contributing to the compensation fund; questions from insurance companies as to whether all the claims that have flooded the court are legitimate; and complaints about the hefty fees that have been paid to lawyers and financial consultants.

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