(AP Photo/Elaine Thompson, File)

Boy Scouts of America seek to halt bankruptcy case brought on by sexual abuse claims

The bankruptcy comes from thousands of sexual abuse claims by former Boy Scouts

Roadblocks are continuing to pop up in the Boy Scouts of America bankruptcy case as the organization tries to finalize a reorganization plan built around a global resolution of thousands of sexual abuse claims by former Boy Scouts.

Attorneys for the youth organization filed a motion on Monday asking a Delaware bankruptcy judge to extend a preliminary injunction that halted lawsuits against local BSA councils and sponsoring organizations during the bankruptcy.

BSA attorneys said the filing was necessary because the official tort claimants committee that represents sexual abuse victims refused to consent to an extension, despite doing so several times in the past.

The current injunction expires March 19. The BSA, which hopes to emerge from bankruptcy this summer, is seeking an extension through July 19.

Attorneys for the BSA argue that maintaining the injunction is critical to restructuring efforts, including enabling local councils and chartered organizations to participate in mediation and, ultimately, make “a substantial contribution” to a settlement and global resolution of abuse claims. Allowing lawsuits against local councils and sponsoring organizations to proceed will make it difficult, if not impossible, for the BSA to both equitably compensate abuse survivors and ensure that the organization can continue to carry out its charitable mission, they contend.

“The TCC is apparently willing to gamble with the fortunes of abuse survivors and the debtors when the stakes are the highest,” BSA attorneys wrote, referring to the tort claimants committee.

An attorney for the committee did not immediately respond to an email seeking comment Tuesday.

Monday’s court filing came just days after the bankruptcy judge heard arguments on a request by insurance companies for permission to serve document requests on 1,400 people who have filed sexual abuse claims and to question scores of them under oath in an effort to determine whether there is widespread fraud in the claims process.

More than 95,000 sexual abuse claims have been filed in the case. Before the bankruptcy filing, the BSA had been named in about 275 lawsuits and told insurers it was aware of another 1,400 claims. The number of lawsuits has more than tripled in the past year to about 860 lawsuits in more than 110 state and federal courts. Roughly 600 were filed after the organization first sought the preliminary injunction.

The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection last February in an effort to halt hundreds of individual lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.

The roughly 250 local councils, which run day-to-day operations for local troops, are not listed as debtors in the bankruptcy and are considered by the Boy Scouts to be legally separate entities, even though they share insurance policies and are considered “related parties” in the bankruptcy case.

Attorneys for abuse victims made it clear from the onset of the bankruptcy that they would go after campsites and other properties and assets owned by councils to contribute to a settlement fund.

But the tort claimants committee has been frustrated with the response by local councils to requests for document production and information on their financial assets. After seeking court permission last year to issue subpoenas for information it claimed was being withheld by the BSA and its local councils, the committee filed a complaint last month challenging BSA’s contention that two-thirds of its listed $1 billion in assets, more than $667 million, are “restricted assets” unavailable for creditors.

More than half of the purportedly restricted assets, $345.4 million, consists of a note receivable from Arrow WV, a non-profit entity that was formed by the BSA in 2009 and which owns the Summit Bechtel Reserve in West Virginia, home to the National Scout Jamboree. The BSA leases the Summit from Arrow WV and provides the services required for its operation.

The tort committee contends that there is no restriction that could be applied to the Arrow WV note.

The BSA’s purportedly restricted assets also include three “High Adventures Facilities” valued at more than $63 million. They are the Philmont Scout Ranch in New Mexico, the Northern Tier in Minnesota and the Florida Sea Base. The committee asserts that there are no specific deed restrictions or donor restrictions that preclude the sale of those facilities and use of the proceeds to pay creditors. It also claims that the BSA previously took the position that they were unrestricted.

Attorneys for the BSA noted in Monday’s court filing that the tort claimants committee has received some 327,000 pages of documents regarding local council assets, the nature of restrictions on those assets, and historical transactions.

READ MORE Tiger Woods seriously injured in California car crash

READ MORE: B.C. salmon farmers request more time to leave Discovery Islands

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Boy Scouts sexual abuse

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

(Phil McLachlan - Capital News file)
COVID-19 exposures on two Kelowna flights

The BCCDC announced two Pacific Coastal Airlines had potential COVID-19 exposures

The Independent Investigations Office of B.C. has cleared the Lumby RCMP of any wrongdoing after a missing person was found deceased in December 2020. (IIO photo)
Police watchdog says Lumby RCMP played no role in missing person’s death

The body was found by a family member shortly after the RCMP suspended their search

Longtime Vernon friends Zach Anderson, left, and Justin Mitchell discussed depression on social media. Anderson is in Perth, Australia, where he is partaking in a running event to raise money and awareness of depression in memory of longtime Morning Star editor Glenn Mitchell, Justin’s father. (Photo contributed)
Vernon man laces up for mental health challenge in honour of Glenn Mitchell

Zach Anderson, with blessing of Mitchell’s family, raising awareness of depression Down Under

The Dixie Fried Hep Katz are featured in episode four of the Focus Online Series, March 4-7. (Vernon and District Performing Arts Centre photo)
Okanagan talents shine under Vernon spotlight

12-year-old from Lake Country, Enderby singer-songwriter-guitarist and Kelowna duo in Focus

School bus fees are being charged to all riders in the Vernon School District. (Courtesy photo)
Parents pressure Vernon school board to curb bus fee hike

More than 1,200 signatures on petition against $200 rider fees, to be discussed at board meeting

COVID-19 vaccines were available at a site on East Pender in Vancouver’s Downtown Eastside Feb. 25. (Twitter/Sarahblyth17)
Vancouver’s Downtown Eastside residents offered $5 after getting COVID-19 vaccine

It’s an effort to ‘incentivize people to engage,’ says B.C. Health Minister Adrian Dix

</p>
A survey by Statistics Canada finds Black Canadians earn less than non-visible minority Canadians despite having higher levels of education. (The Canadian Press file photo)
COVID-19 worsened unemployment picture for Black Canadians

Black Canadians also more likely to suffer other hardships

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

On June 23, 2020, Sunrise Rotary announced it will be donating $50,000 in support of the Bridge Youth and Family Services for the construction of the “Okanagan Youth Recovery House” project for young people under the age of 19 who are experiencing addiction. (Contributed)
Interior Health adds 10 youth substance-use treatment beds in the Okanagan

The Bridge Youth and Family Services will operate the beds

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

(Black Press Media files)
B.C. teacher transferred then suspended after students report feeling ‘scared, nervous’

Authorities found that teacher did not create inviting, respectful environment for students

Victoria’s Swartz Bay terminal. (Black Press Media file photo)
BC Ferries offers cheaper, prepaid fare options

Ferry service preparing for busy terminals when travel restrictions are lifted

The District of Sicamous got behind a UBCM resolution which would keep loggers off managed snowmobile trails in the winter. (File photo)
Sicamous, snowmobile club want to keep loggers off sled trails in the winter

Resolution going to UBCM asking that recreational use be given priority in peak snowmobile season

Most Read