February 12, 2019

Boy Scouts Bankruptcy Impact on Abuse Survivors in Litigation

If the BSA goes through with its bankruptcy filing, this could drastically shorten the time abuse survivors have to file a claim with the bankruptcy court. The deadline could be as short as four months and bar most future claims. 

Attempting to get financial relief from sexual abuse lawsuits by filing for bankruptcy is starting to look like an emerging trend for youth organizations. In late 2018, USA Gymnastics filed for bankruptcy protection, asserting that the filing would help resolve litigation relating to physician Larry Nassar’s sexual misconduct. 

The Roman Catholic Archdiocese of Santa Fe also filed for bankruptcy at the end of 2018. The bankruptcy filing came after Archbishop John Wester disclosed the diocese is facing more than 35 active claims from sex abuse survivors. According to watchdog website Bishipaccountability.org, nineteen dioceses have filed for bankruptcy since the Catholic sex scandal first emerged more than 20 years ago. 

Pamela Foohey, Associate Professor of Law at Indiana University, indicates that the type of bankruptcy that the Scouts is currently considering would allow the organization to restructure and continue operating to help meet its obligation to sex abuse survivors. 

Foohey cautions that getting insurers to cooperate in payouts will continue to be key going forward. However, there is a precedent of insurers meeting nonprofits halfway during these sorts of reorganizations. So far, the Catholic diocese reorganizations have helped move along settlements totaling about $1 billion. In most of these resolutions, insurers agreed to pay half of the settlement. 

Consequently, filing for bankruptcy will open the door for negotiations with insurers regarding abuse survivor settlement payments. 

If you, or a loved one, suffered from sexual abuse or misconduct from a Boy Scouts employee or volunteer, you shouldn’t continue to suffer in silence. Your time to file a claim could be limited. Contact us today to learn how we have helped other victims in their fight for justice against BSA for allowing these atrocities to continue to protect its financial interests and reputation.

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