A panel representing several Catholic entities in the Boy Scouts of America bankruptcy has reached a settlement with the BSA and withdraws its objections to its proposed reorganization plan, attorneys told a judge on Friday.
The announcement came on the fifth day of a trial to determine whether the Delaware judge will approve the BSA’s reorganization plan.
Under the settlement, virtually every Roman Catholic entity in the country, including parishes, schools, dioceses and archdioceses, involved in Scouting would be considered a “participating chartered organization” upon bankruptcy.
This would release them from liability for all scouting-related child sexual abuse claims against them from 1976 to the present day, and for all pre-1976 claims subject to coverage by insurance companies that have made their own settlements. in the BSA bankruptcy. They would also have 12 months to negotiate financial contributions to a settlement fund for victims of abuse in return for a full discharge of liability for all Scouting-related abuse claims.
In exchange, the Catholic entities would relinquish their rights to all policies issued by the insurers that set up.
Lawyers for the Catholic committee had previously argued that the BSA’s plan unfairly treated chartered troop-sponsoring organizations such as churches and civic groups, exposing them to future lawsuits while depriving them of their rights under the BSA insurance policies.
“With this agreement in place, we have even greater consensus as we move toward confirmation,” the Boy Scouts said in a statement.
As part of the settlement, members of a committee representing 10 Catholic dioceses and archdioceses and the Catholic Mutual Relief Society of America – a church-affiliated nonprofit that insures hundreds of dioceses, religious orders and institutions – have also agreed to work with Boy Scouts through at least 2036 to improve and sustain Scouting. The agreement includes the recommendation that dioceses support scouting as part of their youth ministries and cooperate with local scout councils to establish new units.
These provisions could prove essential for the Boy Scouts after decades of steady declines in membership. Its current membership is equal to 1938 levels.
The Boy Scouts, based in Irving, Texas, filed for bankruptcy protection in February 2020 in a bid to end hundreds of individual lawsuits and create a fund for men who say they were sexually abused as children. involved in scouting. Although the organization faced 275 lawsuits at the time, it was the subject of more than 82,000 sexual abuse claims in the bankruptcy case.
The reorganization plan calls for the Boy Scouts and its 250 local councils to contribute up to $786 million in cash and property and to allocate certain insurance rights to a fund for abuse claimants. In exchange, they would be released from any further liability.
The BSA’s two largest insurers, Century Indemnity Co. and The Hartford, would contribute $800 million and $787 million respectively, while other insurers have agreed to contribute around $69 million. The organization’s former biggest troop sponsor, The Church of Jesus Christ of Latter-day Saints, commonly known as the Mormon Church, is reportedly paying $250 million for abuse claims involving the church. Congregations affiliated with The United Methodist Church have agreed to contribute $30 million.
Troop-sponsoring organizations and settlement insurers would also be released from further liability in exchange for their contributions to the fund.
Bishop John Schol, a United Methodist leader who oversees eastern Pennsylvania and New Jersey for the denomination and was involved in bankruptcy negotiations, became emotional Friday during his testimony on the Methodist settlement.
Schol said Methodist goals include acknowledging and understanding the harm suffered by victims of abuse, ensuring their voices are heard, implementing policies to prevent future abuse, and compensation.
“We are sorry for what happened to the survivors throughout this time, and even this process,” he said.
“We always wanted to make sure the survivors weren’t a number,” Schol added as his voice began to crack, “but they were human beings and we would do whatever we could to maintain the dignity of the survivors”.
When asked if he thought the $30 million settlement was fair, Schol said there was nothing anyone could do for survivors to make it fair. “All I can say is that we did our best to find a fair solution,” he said.
In total, the compensation fund would total more than $2.6 billion, which would be the largest comprehensive sexual abuse settlement in US history. The average recovery per plaintiff, however, would be significantly lower than other sexual abuse scandal settlements involving large numbers of victims.
The BSA plan still faces objections from several unsettled insurance companies, as well as the US bankruptcy trustee, who acts as a watchdog in such cases to ensure compliance with the laws. on bankruptcy.