Boy Scouts of America Files for Bankruptcy Due to Sexual Abuse Lawsuits, RI Chapter Sitting on $32M

Boy Scouts of America Files for Bankruptcy Due to Sexual Abuse Lawsuits, RI Chapter Sitting on $32M

On Tuesday, the Boy Scouts of America (BSA) announced that the national organization has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. 

The BSA is facing tens of thousands of lawsuits tied to sexual abuse of children by scouting staff and volunteers. The organization claims to have 2.2 youth members.

The BSA said that the bankruptcy was necessary “to achieve two key objectives: equitably compensate victims who were harmed during their time in Scouting and continue carrying out its mission for years to come. The BSA intends to use the Chapter 11 process to create a Victims Compensation Trust that would provide equitable compensation to victims.”

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In Rhode Island, the local scouting affiliate is the Narragansett Council which is not directly impacted by the national organization’s bankruptcy.

According to the Narragansett Council’s 2017 tax documents the organization has over $32 million of assets.

Impact of Scouting

According to the national organization, “Scouting programs, including unit meetings and activities, council events, other Scouting adventures and countless service projects, will continue throughout this process and for many years to come. The BSA fully intends to maintain its commitments to its members, families, volunteer leaders, employees, retirees, donors and alumni to the fullest extent permitted by bankruptcy laws. The organization also will pay its vendors and partners for all goods and services delivered from today forward.

Local councils, which provide programming, financial, facility and administrative support to Scouting units in their communities, have not filed for bankruptcy. They are legally separate, distinct and financially independent from the national organization.

“The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting. We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” said Roger Mosby, President and Chief Executive Officer. “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process – with the proposed Trust structure – will provide equitable compensation to all victims while maintaining the BSA’s important mission.”

 

Establishment of the Victims Compensation Trust and Support for Victims of Abuse

Ultimately, the bankruptcy will shield the organization from some lawsuits.

"Tragically, there have been times when individuals took advantage of the BSA’s programs to harm children. The BSA firmly believes that a proposed Victims Compensation Trust structure is the best means of compensating victims in a way that is equitable and protects their identities. The BSA encourages victims to come forward to file a claim as the bankruptcy process moves forward and will provide clear and comprehensive notices about how to do so," said the organization.

In a press release the organization claims, "The BSA has, for years, funded in-person counseling for any current or former Scout who was a victim of abuse as well as victims’ family members, by a provider of their choice. As an extension of this commitment to supporting victims, the BSA recently announced a partnership with 1in6, a trusted national resource for male survivors, to expand their services so that victims of abuse are able to anonymously access vital support from trained advocates when and how they need it. Victims can access 1in6 services at www.1in6.org/BSA. This is a multiyear commitment, which the BSA feels is an important component of its ongoing efforts to support victims."

Additional information about the BSA’s multilayered safeguards, our commitment to support victims, and our efforts to be part of the broader solution to child abuse is available at www.scouting.org/youth-safety.

Read the BSA’s Open Letter to Victims here.

More information and updates about the restructuring are available via the national organization’s dedicated restructuring website, www.BSArestructuring.org. Victims, as well as vendors and other potential creditors who have questions about their claims may contact [email protected] or call 1-866-907-BSA1 for the fastest response.

The BSA is represented in the restructuring by Sidley Austin LLP as legal counsel and Alvarez & Marsal North America LLC, as financial advisor.