On February 18, 2020, Boy Scouts of America filed bankruptcy following an avalanche of sex-abuse claims from about 84,000 survivors. After over a year in bankruptcy and three unsuccessful settlement attempts, the Boy Scouts and local Councils reached a settlement agreement with The Creditor’s Committee (TCC), the Coalition for Abused Scouts, and the Future Claims Representative.

The plan represents an imperfect solution to an impossibly difficult and intractable problem. It avoids decades of serial bankruptcies of local Councils around the country, and it stops the bleeding of assets that dwindles recovery for survivors the longer Boy Scouts remains in bankruptcy.

The main terms of the settlement have the Boy Scouts contributing $250 million and local Councils contributing $600 million to the bankruptcy trust out of which survivors will be paid based on their claim. Additionally, Boy Scouts and local Councils assigned the rights to insurance funds to the trust. This would provide potentially billions of dollars of recovery for survivors. The settlement agreement also includes non-monetary provisions, including the Boy Scouts taking responsibility for the sexual abuse that occurred under its watch and safe scouting provisions to ensure the wide-spread abuse does not occur to anyone else.

However, the settlement is not guaranteed. The plan to create the settlement trust still needs approval from creditors, including the survivors. If the plan is approved, the next phase will be obtaining monies from the insurance companies which insured the BSA and local Councils.

While the fight is far from over, this settlement provides many survivors the best opportunity to recover. While we know that the trauma caused by these unspeakable acts are long-lasting, we are hopeful that this settlement will assist survivors with the healing process. We at Penn Law are honored to present our clients in this case.

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