(AP Photo/Elaine Thompson, File)

Boy Scouts of America seek to halt bankruptcy case brought on by sexual abuse claims

The bankruptcy comes from thousands of sexual abuse claims by former Boy Scouts

Roadblocks are continuing to pop up in the Boy Scouts of America bankruptcy case as the organization tries to finalize a reorganization plan built around a global resolution of thousands of sexual abuse claims by former Boy Scouts.

Attorneys for the youth organization filed a motion on Monday asking a Delaware bankruptcy judge to extend a preliminary injunction that halted lawsuits against local BSA councils and sponsoring organizations during the bankruptcy.

BSA attorneys said the filing was necessary because the official tort claimants committee that represents sexual abuse victims refused to consent to an extension, despite doing so several times in the past.

The current injunction expires March 19. The BSA, which hopes to emerge from bankruptcy this summer, is seeking an extension through July 19.

Attorneys for the BSA argue that maintaining the injunction is critical to restructuring efforts, including enabling local councils and chartered organizations to participate in mediation and, ultimately, make “a substantial contribution” to a settlement and global resolution of abuse claims. Allowing lawsuits against local councils and sponsoring organizations to proceed will make it difficult, if not impossible, for the BSA to both equitably compensate abuse survivors and ensure that the organization can continue to carry out its charitable mission, they contend.

“The TCC is apparently willing to gamble with the fortunes of abuse survivors and the debtors when the stakes are the highest,” BSA attorneys wrote, referring to the tort claimants committee.

An attorney for the committee did not immediately respond to an email seeking comment Tuesday.

Monday’s court filing came just days after the bankruptcy judge heard arguments on a request by insurance companies for permission to serve document requests on 1,400 people who have filed sexual abuse claims and to question scores of them under oath in an effort to determine whether there is widespread fraud in the claims process.

More than 95,000 sexual abuse claims have been filed in the case. Before the bankruptcy filing, the BSA had been named in about 275 lawsuits and told insurers it was aware of another 1,400 claims. The number of lawsuits has more than tripled in the past year to about 860 lawsuits in more than 110 state and federal courts. Roughly 600 were filed after the organization first sought the preliminary injunction.

The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection last February in an effort to halt hundreds of individual lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.

The roughly 250 local councils, which run day-to-day operations for local troops, are not listed as debtors in the bankruptcy and are considered by the Boy Scouts to be legally separate entities, even though they share insurance policies and are considered “related parties” in the bankruptcy case.

Attorneys for abuse victims made it clear from the onset of the bankruptcy that they would go after campsites and other properties and assets owned by councils to contribute to a settlement fund.

But the tort claimants committee has been frustrated with the response by local councils to requests for document production and information on their financial assets. After seeking court permission last year to issue subpoenas for information it claimed was being withheld by the BSA and its local councils, the committee filed a complaint last month challenging BSA’s contention that two-thirds of its listed $1 billion in assets, more than $667 million, are “restricted assets” unavailable for creditors.

More than half of the purportedly restricted assets, $345.4 million, consists of a note receivable from Arrow WV, a non-profit entity that was formed by the BSA in 2009 and which owns the Summit Bechtel Reserve in West Virginia, home to the National Scout Jamboree. The BSA leases the Summit from Arrow WV and provides the services required for its operation.

The tort committee contends that there is no restriction that could be applied to the Arrow WV note.

The BSA’s purportedly restricted assets also include three “High Adventures Facilities” valued at more than $63 million. They are the Philmont Scout Ranch in New Mexico, the Northern Tier in Minnesota and the Florida Sea Base. The committee asserts that there are no specific deed restrictions or donor restrictions that preclude the sale of those facilities and use of the proceeds to pay creditors. It also claims that the BSA previously took the position that they were unrestricted.

Attorneys for the BSA noted in Monday’s court filing that the tort claimants committee has received some 327,000 pages of documents regarding local council assets, the nature of restrictions on those assets, and historical transactions.

READ MORE Tiger Woods seriously injured in California car crash

READ MORE: B.C. salmon farmers request more time to leave Discovery Islands

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Boy Scouts sexual abuse

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

(Black Press file photo)
Blackfalds continuing its fight for a registries office

The Town of Blackfalds has been fighting for a Registry Service outlet for roughly a decade

Alberta Premier Jason Kenney said Thursday that the province may consider a regional approach to loosening COVID-19 restrictions if numbers continue to decline. (photo by Chris Schwarz/Government of Alberta)
Province further easing health restrictions

Numbers of people hospitalized and in intensive care has dropped dramatically, says premier

Eric Rajah, co-founder of A Better World. (Photo Submitted)
Two Lacombe residents recieve award from Governor General for chairty work

Eric Rajah and Brian Leavitt co-founded A Better World, a charity which started in Lacombe in 1990

A ” Justice for Jeff” T-shirt. (Photo submitted)
Rally to be held outside courthouse for man slain in Lacombe

Sentencing for accused charged with manslaughter with a firearm set for March 4 in Red Deer

File photo
Alberta’s central zone has 670 active cases

301 new cases identified Sunday

Bookings for COVID-19 vaccines for people age 75 or older start Wednesday. (File photo by THE CANADIAN PRESS)
Updated: Delays for seniors booking for vaccine appointments

By 9:20 a.m. Wednesday, 4,500 seniors had booked their appointments

Ryan Jake Applegarth of Ponoka, 28, is scheduled to appear at Ponoka Provincial Court on March 12, 2021. (File photo)
Discussions about justice continue as Ponoka murder victim’s case proceeds

Reaction to comments Ponoka Staff Sgt. Chris Smiley made to town council last month

Dr. Stanley Read
Hometown Bashaw doctor recognized with alumni award for AIDS work

Dr. Stanley Read, born and raised in Bashaw, is considered a global health leader

A copy of the book “And to Think That I Saw It on Mulberry Street,” by Dr. Seuss, rests in a chair, Monday, March 1, 2021, in Walpole, Mass. Dr. Seuss Enterprises, the business that preserves and protects the author and illustrator’s legacy, announced on his birthday, Tuesday, March 2, 2021, that it would cease publication of several children’s titles including “And to Think That I Saw It on Mulberry Street” and “If I Ran the Zoo,” because of insensitive and racist imagery. (AP Photo/Steven Senne)
6 Dr. Seuss books won’t be published for racist images

Books affected include McElligot’s Pool, On Beyond Zebra!, Scrambled Eggs Super! and The Cat’s Quizzer

AstraZeneca’s vaccine ready for use at the vaccination centre in Apolda, Germany, Sunday, Feb. 28, 2021. THE CANADIAN PRESS/Michael Reichel/dpa via AP
National panel advises against using Oxford-AstraZeneca’s COVID-19 vaccine on seniors

NACI panel said vaccines from Pfizer and Moderna are preferred for seniors ‘due to suggested superior efficacy’

Shipping containers are seen at the Fairview Cove Container Terminal in Halifax on Friday, Aug. 25, 2017. THE CANADIAN PRESS/Andrew Vaughan
Canadian economy contracted 5.4 per cent in 2020, worst year on record

Drop was largely due to shutdowns in the spring as COVID began to spread

THE CANADIAN PRESS/Jeff McIntosh
Time to check the mail: Every household to receive a Canada Post postcard this spring

Postcard can be mailed for free to any address in Canada

A cross-country skier glides along the banks of the Ottawa River in Ottawa on Thursday, Feb. 25, 2021. Canadians across the country can look forward to a mild spring peppered with the odd winter flashback throughout the first part of the season, according to predictions from one prominent national forecaster. THE CANADIAN PRESS/Sean Kilpatrick
Mild spring with some wintry blasts predicted for most of Canada: Weather Network

Weather Network is forecasting a slower than average start to spring in British Columbia

AstraZeneca’s vaccines are ready for use at the vaccination center in Apolda, Germany, Sunday, Feb.28, 2021. (Michael Reichel/dpa via AP)
Feds hoping for AstraZeneca shots this week as Pfizer-BioNTech prepare next delivery

The first of those doses could start to arrive in Canada as early as Wednesday

Most Read