The Boy Scouts of America filed for bankruptcy Tuesday as the century-old institution faces spiraling costs from hundreds of sexual abuse lawsuits. The group’s bankruptcy filing in Delaware listed whopping liabilities that ranged between $100 million and $500 million and assets of $1 billion to $10 billion.* In response to the deluge of suits, the youth organization that says it currently serves more than 2 million youths began positioning itself for Chapter 11 bankruptcy as far back as December 2018, but the actual filing didn’t take place until this week.
By seeking bankruptcy protection, the outdoor and youth leadership group, which claims more than 110 million participants since its inception, puts a halt to the litigation and will give the Boy Scouts a window to negotiate settlements with those who have sued, potentially rolling all claims into a single final resolution. It’s a similar approach used by USA Gymnastics and Catholic dioceses as they grappled with potential judgments against them running into the hundreds of millions of dollars. “I want you to know that we believe you, we believe in compensating you, and we have programs in place to pay for counseling for you and your family,” said Jim Turley, the national chair of Boy Scouts of America, after the filing. Turley said bankruptcy was declared in order to create a trust to compensate abuse victims.
The bankruptcy filing stemmed from a new wave of suits that grew out of an Oregon case against the Boy Scouts in the 2000s that left the nonprofit liable for $18.5 million in punitive damages, the largest verdict against the group in its history. “Paul Mones, a lawyer in that case, said he recalled musing with his co-counsel at the time that the files may just be the tip of the iceberg that could ultimately send the Boy Scouts toward bankruptcy,” the New York Times reports. “But instead of trying to establish a compensation fund for victims over the years, he said, the organization continued trying to protect its reputation.”
“The trial also triggered the public release of internal files kept for decades that revealed the identities and crimes of hundreds of known abusers,” the Oregonian notes. “The files informed thousands of former Scouts about the pervasiveness of sexual abuse in the organization and the extent of the group’s knowledge, he said. The records prompted hundreds of lawsuits, including several in Oregon.” Since then, select states have opened windows for abuse victims to prosecute alleged crimes that normally would fall outside of the statute of limitations, paving the way for a spike in lawsuits against the Boy Scouts.
Correction, Feb. 18, 2020: This post originally misstated that the organization has assets of less than $50,000. It has $1 billion to $10 billion in assets.