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Boy Scouts of America files for bankruptcy due to sex abuse lawsuits

  • Boy Scouts of America files for bankruptcy due to sex abuse lawsuits
    The nonprofit group, which counts more than two million youth participants, follows Catholic dioceses and U.S.A. Gymnastics in seeking bankruptcy protection amid sex-abuse cases. Boy Scouts of America files for bankruptcy due to sex abuse lawsuits
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The nonprofit group, which counts more than two million youth participants, follows Catholic dioceses and U.S.A. Gymnastics in seeking bankruptcy protection amid sex-abuse cases.

The Boy Scouts of America, barraged by hundreds of sex-abuse lawsuits, filed for bankruptcy protection Tuesday in hopes of working out a potentially mammoth victim compensation plan that would enable the hallowed, 110-year-old organization to carry on.

The Chapter 11 filing in federal bankruptcy court in Wilmington, Delaware, sets in motion what could be one of the biggest, most complex bankruptcies ever seen. Scores of lawyers are seeking settlements on behalf of several thousand men who say they were molested by scoutmasters or other leaders decades ago but are only now eligible to sue because of recent changes in their states' statute-of-limitations laws.

By going to bankruptcy court, the Scouts can put those lawsuits on hold for now. But they could ultimately be forced to sell off some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation fund that could surpass $1 billion. BSA first explored bankruptcy in December 2018. 

The Boy Scouts held talks in recent months with some victims’ lawyers, aimed at finding a way to settle all the claims, but no agreement was reached. Under bankruptcy protection, the Boy Scouts could ask a judge to approve a compensation plan.

The national organization said in its filing that it had assets exceeding $1 billion and liabilities in the $500 million to $1 billion range. A major issue in the case is expected to be whether the assets of local Boy Scouts councils, which own most Boy Scout camps and facilities, should also be tapped for the compensation fund.