(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

Immanuel Covenant Reformed Church at 35063 Page Rd. in Abbotsford was among three Fraser Valley churches that the B.C. government tried to get a court injunction against for holding in-person services. (Google Maps)
B.C. churches in court to attempt to overturn ban on in-person services

A judge will hear arguments Monday through Wednesday

(Black Press file photo)
Child in critical condition after Harrison Mills incident, homicide investigators deployed

The child was transported to hospital but is not expected to survive

Hospital outbreaks included in Fraser Health update Feb. 28, 2021. (Black Press file)
Fraser Health declares COVID-19 outbreaks at Chilliwack General and Surrey Memorial

The medicine units are temporarily closed but ERs remain open, according to Fraser Health update

Chilliwack's David Leger couldn't see Mt. Cheam for all the smog back in 1998, and that led him to eventually found Loop Energy, a pioneer in hydrogen fuel-cell technology. (Facebook photo)
Loop Energy: How a humble Chilliwack startup became a multi-million dollar fuel cell pioneer

This is part 1 of a 3-part series on the rise of Loop Energy, now being traded publically on the TSX

The Bug Girl, written by seven-year-old Sophia Spencer, is being given to 500 B.C. classrooms as part of Canadian Agriculture Literacy Month. (Submitted photos)
Reading challenges part of Canadian Agriculture Literacy Month

Abbotsford-based BC Agriculture in the Classroom participates in 10th annual event

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
COVID-19 vaccination set to start for B.C. seniors aged 80-plus

Long-term care residents protected by shots already given

A GoFundMe campaign for Riley Stevens and his family has raised more than $5,700 since launching last week. (Contributed photo)
White Rock mom of sick tot ‘totally blown away’ by donations, offers help

GoFundMe campaign to help family of Riley Stevens crests $5,700

Sewage plant in Lower Mainland, operated by Metro Vancouver. (Metro Vancouver screenshot)
‘Poop tracker’ launches as researchers test Lower Mainland sewage water for COVID-19

‘Studying the virus in wastewater allows researchers to look at an entire population…’

(Pxhere)
Compensation fund opens for B.C. students negatively affected by incorrect exam marks

Marks for 2019 provincial exams were incorrectly tabulated

The humanoid sensing robot has a 3D printed finger cap that measures oxygen levels. (Dr. Woo Soo Kim)
Medical care robots being made with 3D origami in B.C. lab

Would you let a robot take your temperature?

B.C. Premier Gordon Campbell gets acquainted with Tsawwassen First Nation Chief Kim Baird’s 10-month-old daughter Sophia, husband Steve and four-year-old Amy at the B.C. legislature before a ceremony to endorse the Tsawwassen Treaty, Oct. 15, 2007. (Sharon Tiffin/Black Press)
Indigenous consent must come first and last for B.C. industrial projects

UN declaration seen as end to a history of horror stories

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

FILE  - In this Friday, Jan 1, 2021 file photo, a lorry driver's documents are scanned on a phone as he passes a checkpoint for the train through the Eurotunnel link with Europe in Folkestone, England. One month after Britain made a New Year split from the European Union's economic embrace, businesses that once traded freely are getting used to frustrating checks, delays and red tape. Meat exporters say shipments have rotted in trucks awaiting European health checks. Scottish fishermen have protested at Parliament over the catch they can no longer sell to the continent because of byzantine new paperwork. (AP Photo/Frank Augstein, File)
FINLAYSON: Government should focus on strengthening B.C.’s leading export industries

To revive the economy, this piece in the strategy is integral, writes Jock Finlayson

Most Read