The official committee that represents victims of child sexual abuse in the Boy Scouts of America bankruptcy is seeking permission from a judge to submit its own restructuring plan to sponsoring organizations from liability.
The official tort complaint committee filed a motion late last week against the BSA’s request to extend the deadline by which Scouts have the exclusive right to vote and seek votes on a restructuring plan.
The BSA’s plan includes a $ 300 million community council contribution to a fund for victims, approximately $ 115 million in BSA cash and non-insurance items, and the assignment of insurance policies from the BSA and the councilors. In return, the 253 local councils and thousands of sponsoring organizations would be released from further liability.
The victims’ committee estimates the value of the approximately 84,000 sexual abuse claims filed in bankruptcy at around 103 billion US dollars.
The committee noted on its court record that it had made an offer of settlement to the Boy Scouts that estimated the value of the approximately 84,000 bankruptcy sexual abuse claims filed at approximately $ 103 billion, and added that those estimates ” extremely conservative ”.
The committee found that its estimate regards each allegation as a single act of abuse, although significant numbers of victims were repeated and abused in various ways over several years. The committee also found that its average claim value of $ 811,215 is below the $ 1.2 million per claim average that the University of Southern California last month in a $ 852 million settlement with more when 700 women had paid the college’s longtime campus gynecologist accused of sexual abuse.
The committee’s objection to the BSA’s exclusivity motion coincided with the final day of a three-day mediation session during which Boy Scout lawyers sought support for their plan from creditors, insurers and other parties.
The mediation meeting followed Judge Laurie Selber Silverstein’s rejection of the BSA’s request for a hearing on April 15 to approve the disclosure statement setting out the restructuring plan. Silverstein, who will instead hold a status conference next Monday, expressed frustration at the lack of progress on the case and said the BSA attorneys had failed to provide “some very necessary information and documents” for a disclosure negotiation.
Victims’ Committee lawyers also expressed frustration at the lack of detail in BSA’s plan, which has been harshly criticized by lawyers representing victims of abuse.
The committee’s lawyers said they should be allowed to submit a plan that would allow debtors to reorganize “without the family’s fire sale agreement with the councils and chartered organizations.”
The committee’s lawyers stated that the biggest difference between their plan and the BSA plan is that their plan does not include non-consensual third party indemnities for the community councils and sponsoring organizations. Instead, their plan would allow the committee or Settlement Trust to negotiate releases, “but not for the relatively meager amount offered by the local councils.” They also said that if Boy Scouts and local councils want to rely on insurance carriers to provide the bulk of compensation for abuse victims, local councils and sponsoring organizations do not need an indemnity.
The committee’s lawyers also claim that their plan will allow the BSA to reorganize as an on-going, “financially viable” entity.
However, BSA attorneys have argued that creditors’ approval of a competing scheme would make it difficult or impossible to negotiate and implement a global abuse claim resolution and would “spark limitless litigation”.
The Boy Scouts of America, based in Irving, Texas, filed for bankruptcy last February to stop hundreds of lawsuits and create a compensation fund for men who were molested as teenagers by Boy Scouts or other leaders decades ago.
Abuse victim attorneys made it clear from the start that they would seek out campsites and other local council land and property to contribute to a settlement fund. The local councils, which conduct the day-to-day operations for local troops, are not debtors of bankruptcy and are viewed by the Scouts as legally separate entities, although they share insurance policies and are considered “related parties” in the US in the event of bankruptcy.
The bankruptcy case was driven by disputes over information provided by local Boy Scout councils about their financial assets, allegations by the BSA that hundreds of millions of dollars worth of its own assets are restricted and unavailable to victims of abuse, and concerns from stalled BSA insurers that lawyers for abuse victims have filed tens of thousands of claims without ascertaining their validity.
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