The trial is set to examine approval of the Boy Scouts’ bankruptcy plan

DOVER, Delaware (AP) — More than two years after the Boy Scouts of America filed for bankruptcy protection amid a spate of child sex abuse allegations, a judge will rule on whether to confirm the proposed reorganization plan in a trial beginning Monday .

The trial in the U.S. bankruptcy court in Delaware is expected to stretch out over several weeks, as attorneys and witnesses argue over a variety of complex issues, including insurance rights, indemnities, the value of some 80,000 child sex abuse lawsuits and how such a large number of claims have been made.

The Boy Scouts, based in Irving, Texas, filed for bankruptcy protection in February 2020 to stop hundreds of individual lawsuits and set up a fund for men who allege sexual abuse as children in Scouting. Although the organization was facing 275 lawsuits at the time, it was the subject of more than 82,000 sexual abuse lawsuits in the bankruptcy proceedings.

The restructuring plan would see the Boy Scouts and their approximately 250 local councilors contribute up to $786 million in cash and property and cede certain insurance rights to an abuse plaintiffs fund. In return, the BSA and councils would be relieved of further liability.

The BSA’s two largest insurers, Century Indemnity Co. and The Hartford, would pay $800 million and $787 million, respectively, into the settlement fund. Other insurers have agreed to contribute about $69 million. The organization’s formerly largest troop sponsor, The Church of Jesus Christ of Latter-day Saints, commonly known as the Mormon Church, has agreed to contribute $250 million to allegations of abuse involving the church. Congregations affiliated with the United Methodist Church have agreed to contribute $30 million.

The troop-carrying organizations and the accounting insurers would also be released from further liability against their contributions.

All in all, the settlement fund would total more than $2.6 billion, which would be the largest aggregate sex abuse settlement in US history. However, the average compensation per plaintiff would be significantly lower than other settlements of sex abuse scandals involving large numbers of victims. The University of Southern California, for example, last year agreed to an $852 million settlement involving more than 700 women who have accused a longtime campus gynecologist of sexual abuse.

The BSA’s plan has met with objections from several opponents, including the bankruptcy trustee, who acts as a watchdog in such cases to ensure compliance with US bankruptcy laws.

Opponents argue, among other things, that the proposed indemnities for non-debtor third parties — including local BSA councils, insurers and force-sponsoring organizations — violate abuse complainants’ rights to due process and are not permissible under the Bankruptcy Act.

Several insurers who have failed to reach an agreement maintain procedures for distributing funds to abuse claimants, violate insurers’ rights under the policies they issue, and would allow claims to be paid that would not win damages in civil lawsuits.

The trial comes just over a month after the Scouts announced a settlement with the Official Abuse Complaints Committee in the case. The committee was appointed by the US Bankruptcy Trustee to represent the best interests of all sexual abuse survivors.

The official committee had long claimed that the BSA’s plan to compensate abuse victims was “grossly unfair,” but said last month it had won key concessions after lengthy negotiations with the BSA and other parties.

For example, the revised plan offers abuse complainants the opportunity to sue insurance companies and local force-sponsoring organizations, such as churches and civic groups, that fail to settle within a year of the reorganization plan taking effect. It also includes enhanced child protection measures for Scouts and provisions to ensure independent administration of the Compensation Fund.

An earlier version of the BSA plan received approximately 73.5% support from 53,596 proposers who voted on it. The judge allowed a second round of voting, which ended last Monday, to allow the proposers to consider the plan changes. These results showed that 56,536 applicants submitted ballots, with 85.7% voting to accept the plan.

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