Boys Scouts bankruptcy judge approves sale of BSA warehouse

Apr 22, 2022, 1:02 PM | Updated: 3:17 pm

DOVER, Del. (AP) — The judge presiding over the Boy Scouts of America bankruptcy has approved the organization’s request to sell its warehouse and distribution center in North Carolina for roughly $13.5 million and lease back the property from the buyer.

The BSA wants to use some of the proceeds from the sale approved by the court Friday as part of its contribution to a proposed $2.6 billion fund to compensate tens of thousands of men who claim they were sexually abused as children while involved in Scouting.

After a monthlong trial, Judge Laurie Selber Silverstein continues to weigh whether to approve the Boy Scouts’ reorganization plan.

The Boy Scouts of America sought bankruptcy protection in February 2020 to stave off a flood of lawsuits alleging child sexual abuse by Scout leaders and volunteers over several decades. At the time, the BSA was facing about 275 filed lawsuits and was aware of roughly another 1,400 pending claims. But more than 82,200 abuse claims have been submitted in the bankruptcy.

Attorneys for BSA insurers, including those that have since reached settlements and now support the plan, have said the sheer volume of claims is an indication of fraud and the result of aggressive client solicitation by attorneys and for-profit claims aggregators.

The reorganization plan calls for the BSA and its 250 local councils, along with settling insurance companies and troop sponsoring organizations, to contribute some $2.6 billion in cash and property to a fund for abuse victims. In return, those entities would be released from further liability, meaning they could not be sued for Scout-related abuse claims.

At Friday’s hearing, Silverstein noted that the findings that the BSA and plan proponents are asking her to make in confirming the plan present her with issues that she has never previously faced as a bankruptcy judge.

“Quite frankly, probably none of my previous rulings in eight years really dealt with this particular type of issue, where there are such extensive findings that people are asking me to make, and where the findings are particularly controversial,” she said.

When an attorney representing a group of insurers opposed to the plan noted that the BSA had filed hundreds of pages of documents in the wee hours Friday morning with plan modifications and revisions, the judge assured him that he would have time to review and respond to them before she rules.

“You’re not in danger of a forthcoming decision in the next few days,” said Silverstein. She must decide a host of controversial and complex issues involving not just the Boy Scouts, but the BSA’s insurers, its 250 local councils, and tens of thousands of troop sponsoring organizations.

Opposing insurers have argued that the plan violates their rights under policies they issued, and that the findings that plan supporters want Silverstein make would bind them to the proposed trust distribution procedures and make it difficult to challenge claim decisions. In an email, one attorney for abuse claimants described such binding trust distribution procedures as a “Holy Grail” that mass tort lawyers have been chasing for years. Insurers say approval by the judge would set a dangerous precedent tort lawyers would use to their advantage in future lawsuits.

Perhaps the most contentious issue, and the one most fraught with legal difficulty, is whether third parties, including settling insurers, local councils and troop sponsors, should be allowed to escape future liability by contributing to the victims fund, or at least not objecting to the plan.

Some survivors argue that releasing their claims against non-debtor third parties without their consent violates their due process rights. The U.S. bankruptcy trustee, the government’s “watchdog” in Chapter 11 bankruptcies, argues that such releases are not allowed under the bankruptcy code.

Such nonconsensual third-party releases, spawned by asbestos and product-liability cases, have been criticized as an unconstitutional form of “bankruptcy grifting,” where non-debtor entities obtain benefits by joining with a debtor to resolve mass-tort litigation in bankruptcy.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

This photo provided by Robert Wilkes, owner of a house boat management company, shows smoke rising ...

Associated Press

Houseboats catch fire while docked at Wahweap Marina on Lake Powell

More than half a dozen house boats momentarily caught fire at a popular boating destination on the Utah-Arizona line on Friday.

1 day ago

File - Women work in a restaurant kitchen in Chicago, Thursday, March 23, 2023. On Friday, the U.S....

Associated Press

US hiring, unemployment jump in May and what that says about the economy

The nation’s employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations.

1 day ago

(Pixabay Photo)...

Associated Press

Oath Keeper from Arizona sentenced for role in Jan. 6 riot at US Capitol

Edward Vallejo, a U.S. Army veteran from Phoenix, oversaw a “Quick Reaction Force” at a Virginia hotel that was prepared to deploy an arsenal of weapons into Washington if needed, authorities say.

2 days ago

FILE - U.S. Border Patrol Chief Raul Ortiz listens during a news conference, Jan. 5, 2023, in Washi...

Associated Press

US Border Patrol chief is retiring after seeing through end of Title 42 immigration restrictions

The head of the U.S. Border Patrol announced Tuesday that he was retiring, after seeing through a major policy shift that seeks to clamp down on illegal crossings at the U.S.-Mexico border following the end of Title 42 pandemic restrictions.

3 days ago

FILE - President Joe Biden talks with House Speaker Kevin McCarthy of Calif., on the House steps as...

Associated Press

House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate

The House approved a debt ceiling and budget cuts package late Wednesday, as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.

3 days ago

Sean Bickings (Family Photo via city of Tempe)...

Associated Press

Family of man who drowned last year in Tempe Town Lake files wrongful death lawsuit

The family of a man who drowned in Tempe Town Lake a year ago filed a wrongful death lawsuit against the city Wednesday, noting that its police department doesn't have a policy requiring officers to go into the water to save someone.

3 days ago

Sponsored Articles

...

OCD & Anxiety Treatment Center

5 mental health myths you didn’t know were made up

Helping individuals understand mental health diagnoses like obsessive compulsive spectrum disorder or generalized anxiety disorder isn’t always an easy undertaking. After all, our society tends to spread misconceptions about mental health like wildfire. This is why being mindful about how we talk about mental health is so important. We can either perpetuate misinformation about already […]

...

Desert Institute for Spine Care

Spinal fusion surgery has come a long way, despite misconceptions

As Dr. Justin Field of the Desert Institute for Spine Care explained, “we've come a long way over the last couple of decades.”

(Desert Institute for Spine Care in Arizona Photo)...

Desert Institute for Spine Care in Arizona

5 common causes for chronic neck pain

Neck pain can debilitate one’s daily routine, yet 80% of people experience it in their lives and 20%-50% deal with it annually.

Boys Scouts bankruptcy judge approves sale of BSA warehouse