I. Background
Employees and volunteers of the Boy Scouts of America (BSA) and local Boy Scout Councils sexually abused thousands of Scout members. Faced with an onslaught of abuse cases, BSA filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.
Judge Silverstein presides over the case, which now includes about 82,000 abuse victim claims. To help manage this massive litigation – the largest sexual abuse case against a single organization in U.S. history – Judge Silverstein appointed a Tort Claims Committee (TCC) to head up the case for abuse victims.
The litigation has more moving parts than most litigation. BSA is not the only defendant in abuse cases. Other defendants include BSA Local Councils, charter organizations such as church groups that operate or sponsor Scouts, and insurance companies that insure all these various companies.
II. The Plan
In this type of bankruptcy, a debtor, like BSA, must propose a plan for how it will handle claims against it. The court then rules on the plan: either approving or denying it, or approving some parts, but not others. If the court does not confirm the whole plan, the debtor may have to propose an amended plan for court approval.
After two years of litigation, BSA proposed its Plan, which the TCC supports. Because of the complexity of this litigation, the Plan is extensive, over 400 pages, and far too detailed to describe in this post. Thus, this post only addresses the Plan’s provisions for sexual abuse claims.
The main points of the Plan include (1) over $1.9 billion to pay for abuse claims with the hope of obtaining more money from future settlements (2) a procedure for examining each abuse claim to determine its legitimacy and value (3) BSA’s adoption of procedures to protect Scouts from abuse going forward, and (4) dismissal of abuse claims against BSA and all settling companies.
III. The Preliminary Order
On March 14, 2022, the hearing on the Plan began and lasted almost four weeks. The hearing included 26 witnesses, over 1000 exhibits, and six days of oral argument from the attorneys.
On July 29, 2022, the judge entered a 281-page order analyzing the Plan. In simple terms, the judge did not approve or deny the Plan. As the TCC put it, the order is “more like a scorecard” on the provisions that the judge may approve and may not approve. Notably, the judge stated that she would not approve the $250 million settlement with the Church of Jesus Christ of the Latter-Day Saints (TCJC) because it included a dismissal of non-abuse claims. In other words, the judge found that the TCJC settlement was too broad. The judge left open the possibility of including TCJC, and future settlements, if her concerns are addressed.
IV. The Amended Plan
On August 12, 2022, BSA filed its modifications to the Plan. The proposed changes seek to address the judge’s concerns. On September 1, 2022, the judge will have a hearing on the Plan as modified. Hopefully, she will rule on the Plan soon after the hearing.
V. The Current Status
We remain in a holding pattern. Assuming the judge approves the Plan, it is possible that one or more non-settling parties may appeal the ruling to the District Court. If so, I hope that the district judge decides the appeal by the end of the year.
Once a plan is finally approved and becomes effective, the claims evaluation process will start. Currently, the Trustee has over 82,000 claims to review. But, that number should decrease once claims are rejected. The trustee may reject a claim for any of several reasons, e.g., the claim form is incomplete, it is a duplicate claim, or the facts of the claim demonstrate that the claim is invalid.
I do not have a crystal ball and cannot predict (1) whether the Plan gets approved or (2) when abuse victims will get paid. I’m keeping my fingers crossed that payments go out by the end of 2023. But, we’ll have to be patient and see what happens.
What I can assure our clients is that we will continue to fight to get you every penny possible.
If you or a loved one has suffered abuse by the Boy Scouts of America, call us at 601-326-0874 for a FREE case evaluation. Chhabra Gibbs & Herrington has an experienced legal team dedicated to holding those responsible and getting the compensation you deserve. Chhabra Gibbs & Herrington is also taking Southern Baptist abuse cases. Chhabra Gibbs & Herrington is an affiliate firm of Chhabra & Gibbs P.A. Contact us now for a free evaluation. For more law news visit msinjurylaw.com.
