Background
Thousands of Scouts were sexually abused by employees and volunteers of the Boy Scouts of America (“BSA”). Many of these victims courageously came forward, and filed abuse cases against the BSA, seeking to hold it accountable for its actions, and inactions. As a result, the BSA filed for bankruptcy protection on February 18, 2020 in the United States Bankruptcy Court of the District of Delaware. The BSA’s decision to file for bankruptcy has affected over 82,000 survivors who have filed sexual abuse claims.
Krause & Kinsman has the privilege of representing nearly 7,000 Scouts who were victimized by the BSA, and is committed to helping these survivors navigate the intricacies of this litigation to ensure they receive the compensation that they deserve.
This is the largest sexual abuse case against a single organization in the history of the United States. Judge Laurie Selber Silverstein is the presiding Judge over the case, which includes the 82,000 abuse victim’s claims. As such, Judge Silverstein has appointed the Tort Claims Committee (“TCC”) to lead the case on behalf of the abuse victims, in order to help manage this massive litigation.
The Bankruptcy Case
The Bankruptcy Court required BSA to propose a plan for how it would handle the 82,000 sexual abuse claims brought against it. After two years of litigation, BSA proposed a plan. This plan was voted on by abuse survivors, and Krause & Kinsman was able to secure votes from 70% of the clients it represents. The votes collected from survivors provided overwhelming support for approval of the plan.
From there a confirmation trial was held, which lasted almost four weeks and included 26 witnesses, over 1,000 exhibits, and six days of oral arguments from attorneys. Judge Silverstein issued her written opinion on July 29, 2022. Then all of the parties negotiated with the judge and mediators regarding revisions to the plan, which ultimately ended with the plan being approved by Judge Silverstein on September 8, 2022.
The plan is hundreds of pages long, but primarily focuses on three parts. First, the plan establishes an independent trust with approximately $2.5 billion to pay for abuse claims. Second, the plan provides a procedure for examining each abuse claim to determine its legitimacy and value, and outlines a path to compensation for abuse survivors. Third, the plan provides a thoughtful and transparent Youth Protection Program to protect Scouts from abuse going forward.
The Current Status
Judge Silverstein’s approval of the plan was a monumental step in this litigation, and has brought survivors one step closer to obtaining compensation. However, parties who were dissatisfied with the plan’s approval have appealed. The briefing on these appeals must be completed by December 21, 2022. From there, the District Court will likely set oral argument, and then issue a ruling on the appeals.
It is important to note that in order for the settlement trust to get up and running, an effective date for the trust needs to be obtained. However, an effective date cannot be obtained until the District Court affirms the Bankruptcy’s Court’s decision. In the event the District Court does affirm the Bankruptcy Court’s decision, parties could then appeal that decision to the Third Circuit Court of Appeals. Doing so does not automatically issue a stay on the bankruptcy proceedings, but if a stay were to be granted by the Circuit Court the settlement trust would not be able to take effect until a decision was rendered, which could take a year or more.
However, there is no way to guarantee or predict exactly how this will play out. Although this case has been going on for two and a half years, we will continue to have to wait while the appellate process is completed. Once the plan is finally approved, and becomes effective, the claims evaluation process will begin. As such, it is impossible to know if the Plan will be approved, and if so when victims will be paid. We are hopeful that will happen in the next 6-18 months, but will have to patiently wait and see what happens.
Krause & Kinsman continues to fight for its clients who have been victimized by the BSA, and will do everything it can to ensure they receive the compensation they deserve.
