The Boy Scouts of America has filed papers with the US Supreme Court arguing that the Court should reject efforts to pause the organization’s bankruptcy plan and the work of a $2.46 billion sex abuse settlement trust. This request comes in response to some abuse claimants seeking to unwind the nonprofit’s Chapter 11 plan that went active last year. These claimants are appealing the Boy Scouts bankruptcy plan and argue that the Supreme Court should halt the settlement while it considers a related case involving Purdue Pharma.
The Boy Scouts’ settlement dispute, which includes over 82,000 abuse claims, revolves around provisions that remove liability for non-debtor affiliates without the consent of affected parties. The organization states that the releases are essential to making the plan work. The Boy Scouts’ bankruptcy plan already includes a $6 billion settlement that releases claims against a nationwide network of local councils and scouting activity sponsors.
The Boy Scouts emerged from Chapter 11 last year after negotiating a plan to settle abuse claims going back several decades. However, the 144 claimants appealing the Boy Scouts bankruptcy plan represent less than 1% of the former scouts who will receive compensation from the settlement trust. The organization also notes that some funds have already been distributed in the last 10 months since the plan went into effect, making it legally and practically impossible for an appellate court to unwind the plan.
In response to the claimants seeking to pause the trust’s work, groups of claimants who voted in favor of the plan, as well as BSA insurers providing the bulk of the settlement cash, also urged the Supreme Court not to disrupt the work of the trust. The trustee appointed to evaluate former scouts’ abuse claims and distribute settlement funds also cautioned against disrupting the trust’s work.
The justices are expected to issue a decision in the coming months, after having appeared divided during arguments in early December over the legality of nonconsensual third-party releases in Purdue’s bankruptcy plan.
The case is Lujan Claimants v. Boy Scouts of America, U.S., No. 23A741, response filed 2/15/24.