BSA Files for Chapter 11 Bankruptcy amid Sex Abuse Lawsuits

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Nearly 15 months after the option was first thrown around, the Boy Scouts of America declared Chapter 11 bankruptcy early Tuesday morning in an effort to preserve the organization amid a growing list of sex abuse lawsuits.

After many states changed their statute of limitations laws for childhood sex abuse victims, the 110 year old organization was hit by a slew of new lawsuits for hundreds, if not thousands of sexual abuse cases largely from the 1970’s.

Between declining membership, and controversies around letting girls into Boy Scouts, the cash strapped youth development organization decided bankruptcy protection would be the best option to both find an “equitable” way to compensate victims and keep scouting around for the current generation.

In a heartfelt letter, National Chairman Jim Turley apologized to the victims and reiterated their pledge to never let such a tragic stain on scoutings history happen again.

Turley notes that in recent years Scouts BSA implemented “mandatory background checks and trainings, a ban on one-on-one interactions between youth and adults, and mandatory reporting of any suspicion of abuse to law enforcement.” He called these, among others, “the strongest and most effective policies found in any youth-serving organization.”

As a way to pay back victims, BSA started a “voluntary financial restructuring to ensure we can equitably compensate all victims of past abuse in our programs, through a proposed Victim’s Compensation Trust.” Bankruptcy protection is designed to allow such a restructuring to occur without closing the organization in the process.

Turley is encouraging “all victims to come forward and file claims so you can receive compensation from this Trust. We will provide clear notices about how to do so.” Though money cannot turn back the clock on such crimes, Scouts BSA is attempting to make things right as best they can.

Local councils, which carry out the bulk of scouting related activities, including operating and maintaining BSA campgrounds and various programs, will remain in operation; they’re separate legal entities from the national organization. Most if not all BSA councils sent out notices to its members ensuring them that scouting will live on through this hurdle.

Michael Pfau, a Seattle lawyer who represents over 300 former scout victims says this goes deeper than we know. Pfau told the Daily Beast, “you’re talking about thousands of perpetrators.” He added, “you’re talking about tens of thousands of victims. This will be the largest bankruptcy the country has ever seen, and likely one of the largest corporate bankruptcies.”

Pfau was disappointed in the protection given to local councils as they hold the bulk of Scouting’s assets, and were “the eyes and ears of the Boy Scouts … the local councils not only hold enormous assets, they are all responsible in many cases for the abuse.”

Nonetheless, Pfau and the victims are hoping for a single settlement to end the prospect of all future cases.