Boy Scouts bankruptcy lawsuit moves forward, but ‘a long way to go’ for sexual abuse survivors awaiting payouts

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In federal bankruptcy court in Delaware, lawyers for the Irving-based Boy Scouts of America are asking a judge to approve the group’s plan to compensate the approximately 80,000 people who say they were sexually abused while participating in the program.

The trial is a complex legal proceeding, in part because there are so many separate parties involved. Melissa Jacoby, Graham Kenan Professor of Law at the University of North Carolina – Chapel Hill, spoke to Texas Standard about what the results will mean for survivors and for local BSA branches.

Listen to Jacoby’s interview in the audio player above or read the excerpts below:

– Financial compensation for survivors is expected to amount to billions of dollars. Some survivor advocates argue that’s not enough money, while some insurance companies say it’s too much.

– It’s unclear how much money each survivor would receive because the case is being handled in an unconventional way: BSA is using Chapter 11 bankruptcy to resolve tens of thousands of abuse claims.

“They’re using bankruptcy, really, as an alternative justice system,” Jacoby said.

– But Jacoby says the reason BSA is going to bankruptcy court is to legally protect several other entities involved in BSA that have not themselves filed for bankruptcy – this includes its insurance companies.

“And of course, if insurance companies are going to invest that money, they also don’t want to be sued for the same things elsewhere,” Jacoby said.

The bankruptcy process, however, does not protect those involved in abuse claims.

– Some survivors’ attorneys do not support the BSA’s use of bankruptcy court to deal with abuse claims. Others argue that it’s the best chance for survivors to get financial compensation for their trauma without having to go through a lengthy lawsuit.

– If the court approves BSA’s plan, BSA would create a trust. The people hired to manage the trust would then determine each survivor’s compensation. But this process might take some time.

“Some have said that even in the best of times it could be as much [as] more than a year or more before even the most easily paid claims are actually paid out, and then insurance companies may still want to fight over their coverage,” Jacoby said.

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