Boy Scouts Of America Files For Bankruptcy Amid Hundreds Of Sex Abuse Lawsuits

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The Boy Scouts of America (BSA) has filed for Chapter 11 bankruptcy protection, the first step in a plan to restructure their finances in order to pay restitution to victims who were sexually abused by members of the organization. The bankruptcy filing does not appear to signal the end of the BSA, as its managers have promised to continue Scouting in the future.

Changes In Laws Have Hurt The Organization

The BSA is far from the only organization to have dealt with adults within its ranks sexually abusing children. In fact, the BSA’s sexual-abuse problem was — in a way — overshadowed by similar allegations within the Catholic Church and USA Gymnastics.

As NPR News reports, in the wake of the Catholic Church sex-abuse scandal and other similar crimes, some states changed their laws to increase the statute of limitations for that particular crime, giving victims more time to come forward with allegations against their abusers.

This change in statue means the BSA is now exposed to lawsuits from men who were sexually abused within the organization decades ago, causing the organization to lose its protection, as described by Paul Mones, an attorney in Los Angeles who is representing many men who are suing the Boy Scouts.

“For years, organizations like the Boy Scouts counted on these laws protecting them. Now those laws are not there, and the Boy Scouts have fallen under their own weight of these abuse allegations and the potential cases that will be filed,” Mones said.

Already a flurry of such lawsuits have been filed, and more are not unlikely.

CLEVELAND, OH - JULY 20: The Boy Scouts of America prepare for the opening of the third day of the Republican National Convention on July 20, 2016 at the Quicken Loans Arena in Cleveland, Ohio. Republican presidential candidate Donald Trump received the number of votes needed to secure the party's nomination. An estimated 50,000 people are expected in Cleveland, including hundreds of protesters and members of the media. The four-day Republican National Convention kicked off on July 18. (Photo by Jeff Swensen/Getty Images)
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As of this writing, it’s unclear how much these lawsuits are going to cost the BSA. Mones pointed to one case that he won in which a victim was awarded a settlement of $20 million.

What’s more, the BSA used to have insurance policies that, in part, would cover settlements of those lawsuits. However, several insurers have pulled out from the organization following accusations that it knew about the sexual abuse and tried to cover it up. Because of this, the BSA may not have the ability to pay those claims. The organization made $285 million in revenue in 2018 and has reported assets worth $1.4 billion.

The Restructuring Is Intended To Protect Local Councils

The restructuring plan under the Chapter 11 filing creates a special fund intended to compensate victims, while also earmarking money to continue its programs.

In doing so, the organization hopes that local councils will be shielded from having to pay victims of sexual abuse, suggests NPR News. Local councils are “legally separate, distinct and financially independent from the national organization.” On their own, they collectively hold assets worth about $3.3 billion.