Sex Suits Drive Boy Scouts Into Bankruptcy

Faced with hundreds, if not thousands, of potential lawsuits regarding alleged sexual abuse of members, the Boy Scouts of America (BSA) has filed for Chapter 11 bankruptcy to restructure the national organization.

The Irving, Texas-based national organization made the announcement this morning. Several hundred local councils are separate, independent 501(c)(3) tax-exempt organizations and did not file for bankruptcy.

The 110-year-old BSA said the bankruptcy filing has two key objectives: equitably compensate victims who were harmed during their time in scouting, and continue carrying out its mission for years to come. Scouting programs will continue throughout the process with BSA planning to pay its vendors and partners for all goods and services delivered.

The national office reported total revenue of $285 million, including almost $79 million in membership dues, for 2018, according to the latest federal Form 990 filed in November. Total assets were reported at $1.4 billion, including a commingled endowment of more than $300 million.

The proposed Victims Compensation Trust structure is the best means of compensating victims in a way that is equitable and protects their identities, according to BSA. The organization 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.”

“The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting,” President and CEO Roger Mosby said via a statement. “We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” he said. “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.”

BSA late last year announced the appointment of Mosby as its new chief executive officer, succeeding Michael Surbaugh, who retired at the end of 2019.

BSA also published “An Open Letter to victims” signed by current Board Chair Jim Turley, in which he apologizes and established a website (www.bsarestructuring.com) to provide information on the process as well as resources to victims. Victims also can access 1in6 services at www.1in6.org/BSA

A week before the bankruptcy filing, BSA announced it had joined forces with 1in6.org, an organization for male survivors of sexual abuse, in a five-year partnership that expands services to better support needs of those who were harmed in Scouting.

BSA has funded in-person counseling for any current or former scout, or member of their family, by a provider of their choice. No proof is required; a victim need only to make a request.

A 2010 Oregon case, in which a jury awarded almost $20 million to a man abused as a scout, triggered the release of the BSA’s internal “Ineligible Volunteer Files,“ also known as the “perversion files,” detailing those adults who the organization deemed unfit to volunteer because of instances of abuse.

BSA is represented in the restructuring by Sidley Austin LLP as legal counsel, and as financial advisor.

Additional information is available at www.scouting.org/youth-safety

Victims, as well as vendors and other potential creditors who have questions about their claims, may contact Restructuring@scouting.org or call 866-907-BSA1 for the fastest response.