Boy Scouts of America Chapter 11 Bankruptcy

Boy Scouts of America File for Chapter 11 Bankruptcy

On February 17, 2020, the Boy Scouts of America announced its filing Chapter 11 Bankruptcy. On May 26, 2020 the bankruptcy court set a claims bar date marking the deadline by which all survivors of child sexual abuse by a BSA volunteer or employee must formally file a claim with the court: November 16, 2020. After this date, a survivor could be denied any sort of recovery from the Boy Scouts of America.

This complicated and highly nuanced legal tactic is often confusing to people who are not familiar with this type of bankruptcy, and it can prevent survivors of child sexual abuse from pursuing legal action. As demonstrated over the years by Catholic dioceses facing similar circumstances, this option stands to benefit the organization far more than adult survivors who were hurt as children by perpetrators employed by or affiliated with the organization. What is most important for survivors to understand about this process is that they still have rights, but the time to take legal action is limited.

Understanding what Chapter 11 really means is crucial to finding the most direct path to healing and justice. We have compiled the following information as a basic introduction to Chapter 11 bankruptcy in the context of the Boy Scouts. We urge all survivors of sexual abuse in Scouting to consult legal counsel before pursuing legal action.

What is Chapter 11 Bankruptcy?

Unlike Chapter 7 bankruptcy, where the debtor liquidates business assets to pay its creditors (usually at the cost of maintaining business operations), Chapter 11 is a bankruptcy process in which the debtor maintains control of its business and property while the court supervises its restructuring and the implementation of a plan to repay creditors.

What does Chapter 11 Bankruptcy Mean for the Boy Scouts of America?

Simply put, Chapter 11 bankruptcy protection allows the Boy Scouts of America to keep doing “business as usual” while actively settling its debts – the debts here being BSA’s responsibility for sexual abuse claims by Scouts and former Scouts. There are two major factors that make this possible which should be on the radar of anyone considering filing a sexual abuse claim against the Boy Scouts of America: a claims bar date and financial reorganization.

Claims Bar Date: An important part of this process provides that the court set a “claims bar date,” which is a date marking the deadline by which all survivors must formally file a claim with the court. In this case, the claims bar date is November 16, 2020. After this date, a survivor could be denied any sort of recovery from the Boy Scouts of America. This helps the Boy Scouts of America limit the number of claims that can be submitted and makes filing in the future more difficult. In a way, this is a lot like the organization hitting the “Reset” button; giving it a fresh start and leaving survivors yet-to-submit-a-claim left with the burdens of the past and limited means for relief.

Financial Reorganization: This is a technical term for moving money and assets around internally to allow debts amassed by the Claims Bar Date (see below) to be more easily paid off without disrupting the flow of business. It is likely that throughout the Chapter 11 process, troops will continue to meet, uniforms will continue to be fabricated, camps will remain open, and general operations will continue undisturbed. In all likelihood, no one currently participating in Scouts will be noticeably impacted by the filing.

What does Chapter 11 Bankruptcy Mean for Scout Abuse Survivors?

The Boy Scouts filing for Chapter 11 bankruptcy greatly compresses the timeline for survivors of abuse to file a claim. The bankruptcy judge has set a claims bar date for November 16, 2020 – the date by which all sexual abuse survivors must file what’s called a proof of claim with the bankruptcy court. If you are a survivor of sexual abuse while in Scouts, you have a right to justice and healing. Your claim may also lead to the release of secret Perversion Files that will expose predators and help stop what happened to you from happening to other kids. We have created a searchable database of publicly available Perversion Files (Chrome or Safari Recommended). Most importantly, your identity throughout the process can remain completely confidential unless you choose to make your identity public. The majority of cases we’ve handled in our 35+ years of working with survivors of childhood sexual abuse have been filed as “John Done” or “Jane Doe.” The decision to use your name is completely up to you. If you wish, your identity will be kept confidential by your lawyers, the court and the media.