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Sexual abuse lawsuits caused Boy Scouts of America to file for bankruptcy
Coleman Legal LLP
Feb 21, 2020

With almost 2.2 million members aged between 7 and 21 and nearly 1 million volunteers in local councils, The Boy Scouts of America (BSA), founded in 1910, is one of the largest non-profit youth organisations in the United States. Former presidents of the BSA include ex-Secretary of State Rex Tillerson and former Secretary of Defence Robert Gates.

The BSA filed for bankruptcy after sexual abuse lawsuits filed against the organisation in several states, claiming the organisation failed to prevent incidents from occurring.

Comprising of 261 councils, they operate local troops and own land in many states as well as other assets which amount up to 70% of the BSA’s assets. Although filing for bankruptcy put all civil lawsuits on hold, the process will allow the organisation to build a compensation fund for its victims, while protecting their councils.

Battling declining membership and abuse claims, the filing made under Chapter 11 of the US bankruptcy code allows the organisation to continue operations and pay its creditors over time. Bankruptcy also enabled the BSA to deal with all its lawsuits in one court, allowing them to make a settlement instead of using its capital to fight individual court cases. Reports revealed that the organisation had liabilities amounting to $1 billion and assets amounting to as much as $20 billion. Other non-profit organisations facing sexual abuse claims include the Catholic Church and USA Gymnastics, who have resorted to bankruptcy to deal with the claims against them.

Chief executor Roger Mosby made a statement saying, “The BSA cares deeply about all victims of abuse and sincerely apologises 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. 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”.

Research, however, revealed that after advertising around the country, the Abused in Scouting group found approximately 2000 people with complaints.

The BSA has stated its councils which are financially independent and legally separate of the organisation, had not filed for bankruptcy.

Keith Rolls Partner Coleman Legal LLP

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