Boy Scouts’ bankruptcy trial advances, but ‘long road ahead’ for sexual abuse survivors awaiting payouts

A federal judge is evaluating the Irving-based youth organization’s plan to compensate plaintiffs.

By Michael Marks & Caroline CovingtonMarch 23, 2022 2:12 pm,

At a federal bankruptcy court in Delaware, attorneys for the Irving-based Boy Scouts of America are asking a judge to approve the group’s plan to compensate the roughly 80,000 people who claim they were sexually abused while participating in the program.

The trial is a complex legal proceeding, in part because there are so many separate parties involved. Melissa Jacoby, the Graham Kenan Professor of Law at the University of North Carolina – Chapel Hill, spoke to Texas Standard about what the results will mean for survivors and for local branches of the BSA.

Listen to the interview with Jacoby in the audio player above or read the highlights below:

– The financial compensation for survivors is expected to be billions of dollars. Some survivor advocates argue that’s not enough money, while some insurance companies say it’s too much.

– It’s unclear how much money each survivor would receive because the case is being handled in an unconventional way: BSA is using Chapter 11 bankruptcy to resolve tens of thousands of abuse claims.

“They’re using bankruptcy, really, as an alternative justice system,” Jacoby said.

– But Jacoby says the reason the BSA is going through bankruptcy court is to legally protect several other entities involved with BSA that haven’t actually filed for bankruptcy themselves – that includes its insurance companies.

“And of course, if the insurance companies are going to put in this money, they don’t ever want to be sued for the same things somewhere else, either,” Jacoby said.

The bankruptcy proceedings, however, do not protect individuals implicated in the abuse claims.

– Some survivors’ attorneys do not support BSA’s use of bankruptcy court to handle abuse claims. Others argue it’s survivors’ best chance at getting financial compensation for their trauma without having to endure a lengthy trial.

– If the court approves BSA’s plan, BSA would set up a trust. Those hired to manage the trust would then determine the compensation for each survivor. But that process could take a while.

“Some have said even in the best case scenario, it may be as much [as] over a year or more before even the easiest claims to pay are actually paid off, and then insurance companies may still want a fight about their coverage,” Jacoby said.

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