Sex Abuse Lawsuits Send Boy Scouts to Bankruptcy Court

Group of young scouts joining hands together

Thousands of former boy scouts nationwide have come forward to say they were sexually abused as children by their scout leaders, counselors, and others within the organization. There have been so many complaints and sex abuse lawsuits that they forced the Boy Scouts to file for Chapter 11 bankruptcy protection. Depending on where you live, that could be good news for victims or a ticking clock on when you can file your claims.

Boy Scouts of America’s “Red Flag List” Show Decades Long History of Child Sex Abuse

The Boy Scouts of America (BSA or Boy Scouts) have been around for more than 100 years. Founded in 1916, they have stood for patriotism, courage, and self-reliance for generations of boys, young men, and starting in 2017, girls too. However, for nearly as long as there have been boy scouts, there have been pedophiles looking to take advantage of the organization to get access to those boys.

In 1935, the New York Times published an article revealing that the organization had a “red flag list” of scout leaders who had been removed from the organization for moral reasons. The physical cards in the Boy Scouts’ two catalogs of volunteers (one alphabetical and one geographical), were marked with red labels when problems were brought to their attention, so that the organization could look carefully at the volunteers’ records if they ever resurfaced in another location.

However, as the organization grew, the Boy Scouts consolidated those red cards into a “red flag list” of 2,919 men who had been dismissed from their positions as scout leaders. Scout troops were supposed to consult that Red Flag List as part of volunteers’ background checks. However, even in 1935, the BSA were aware that, “Sometimes, in spite of these rigid requirements, a moral degenerate may slip through.” That is due in part to the fact that the list itself is strictly confidential. It was not released until 2012, when the Oregon Supreme Court ordered that the records be made public.

Nearly 2000 Former Scouts File Sex Abuse Lawsuits

Last year, a group called Abused in Scouting gathered up nearly 2,000 people with complaints of child sex abuse against Boy Scouts of America -- including at least one from every state. Their ages range from 8 to 93.

And then New York passed the Child Victims Act. Effective August 14, 2019, this law lengthened the state’s statute of limitations for child sex abuse and pornography cases. It also created a one-year window for victims of abuse to file no matter how old their claim was. The Abused in Scouting group and other sex abuse attorneys have used this law and others like it in New Jersey, California, and Arizona to file their claims all at once and put pressure in the Boy Scouts to settle quickly without expensive lawsuits.

Boy Scouts of America Files for Chapter 11 Bankruptcy

That pressure appears to have worked. On February 17, 2020, the Boy Scouts of America filed for Chapter 11 bankruptcy protections in the United States Bankruptcy Court, District of Delaware. The petition will allow the organization to continue operations while reorganizing to consolidate and pay off its debts. According to the BSA’s initial filings, the national organization (without the local Boy Scouts councils) had more than $1 billion in assets, and liabilities valued between $500 and $1 billion. That included money owed to former employees, and 25 law firms representing child sex abuse victims from across the country.

What the BSA’s Bankruptcy Means for Child Sex Abuse Victims

By filing for bankruptcy, the BSA has put a temporary stop (called an automatic stay) to all lawsuits against it. Instead, as part of the bankruptcy process, the Boy Scouts are asking for the court to set aside a single pool of money -- a compensation trust fund -- to pay off anyone with claims based on activity before the filing date. This compensation trust fund could be paid for by selling off BSA property, including campgrounds and hiking trails. To qualify for a part of the trust fund, former scouts and other victims will need to be ready to file their claims within a short window of opportunity, or their claim will be barred forever.

For child sex abuse victims in states with strict statutes of limitations, this bankruptcy settlement could provide an opportunity to get compensation when it is too late to file a claim in their state courts. However, for New York residents, this bankruptcy process threatens to cut short the legislative grace period. It will force everyone, even those whose cases just recently happened, to file their claims now, rather than waiting until they are emotionally ready to tell their stories.

At Eisenberg & Baum, LLP, team of sexual abuse attorneys know how to navigate compensation trust funds to help you protect your claims for child sexual abuse. We can speak with you and your family from our headquarters in the heart of New York City, or conference with you remotely, to help you get compensation for your scout leader’s sexual misconduct. Contact Eisenberg & Baum, LLP, today to talk to a sexual abuse attorney.

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