The role of local Boy Scout councils in the national organization’s Chapter 11 bankruptcy, and the sexual abuse crisis that propelled it, is a flashpoint in a slew of new lawsuits on behalf of men who say they were abused as scouts.
The latest case, filed in Montana on Tuesday by attorneys with Abused in Scouting, includes 10 men who say they were abused by scout leaders. In it, 10 John Does claim that the Montana Scout council is controlled by Boy Scouts of America to such a degree that it is “the alter ego of the BSA.”
The same group filed another suit last month on behalf of eight men in Hawaii. Attorneys with the firm Crew Janci also filed five suits last week in Montana for six clients. Gillon Dumas of Dumas & Vaughn of Oregon filed another four in the last month. Another Seattle-based firm filed three more.
The lawsuits come nearly four months after Boy Scouts filed for bankruptcy reorganization, anticipated for months as a way to limit liability in the abuse cases by carving off assets of the more than 260 local scout councils.
While the approach mirrors that of the Catholic Church, many plaintiffs’ attorneys and advocates believe it is unprecedented for a nonprofit youth organization.
In documents filed in February, and subsequent statements, Boy Scouts of America has argued that the national organization should be the only entity required to cover financial settlements in the sexual abuse cases that landed the organization in a state of near financial collapse.
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The national organization describes its relationship with local councils as essentially a franchise arrangement: The national group handles the development of Scout content and structure, licensing, training, human resources, legal support and information technology; the local councils are separate legal entities.
Under the Scouts’ proposed reorganization plan, local councils would be “Protected Parties” not liable for sexual abuse claims filed against the organization. Victims’ attorneys are fighting against that division, noting that the vast majority of the Scouts’ assets lie outside the national organization’s holdings.
“As someone who has worked on litigating these cases in different states for last 12-13 years, it’s kind of a bitter pill to swallow to listen to them try to distance themselves from local councils,” said Peter Janci of Crew Janci, whose client is chairman of a committee of nine survivors who represent the interests of all survivors in the bankruptcy process.
“The truth is, when you look at their documents and you look at the testimony we’ve gotten in depositions and trial,” he said, “It’s clear they work hand and glove with the local councils to put on the scouting program.”
In a statement, Boy Scouts said the local councils are “distinct and financially independent from the national organization. However, the national organization is advocating for local councils’ interests through this process as we work toward the BSA’s duel objectives: to equitably compensate victims of abuse and continue the mission ofcouting for many years to come.”
“To that end, in January the national organization facilitated the creation of an Ad Hoc Committee of local councils that has an ongoing voice in the national organization’s restructuring process,” the statement continued.
The Boy Scouts’ national organization proposed the creation of a Victims Compensation Trust but has not elaborated on how much money would be set aside for it.
In the original bankruptcy filing, the national organization estimated it owns $70 million in land and buildings.
The USA TODAY Network found $101 million in local councils’ property in the state of New York alone. And, according to the Montana council’s 2018 tax filings, the council had $25 million in assets there, including $14 million in property.
Victims’ attorneys say they are concerned the scouting organization is maneuvering to shield those assets. They say they are having difficulty obtaining financial documents.
“The local councils are turning over their financial information to the bankruptcy case now because the local councils want to be released from liability as part of the bankruptcy,” said Gilion Dumas of Dumas & Vaughn, who has represented dozens of victims. “But the Protective Order in the bankruptcy case prohibits attorneys like me from seeing the financial information of the local councils.
“So how can we agree to a plan that settles claims against the local councils when we don’t have financial information?”
Boy Scouts declined to answer questions about contributions to the Victims’ Compensation Trust, but said it is working with the survivors’ committee and other parties “in structuring and funding a trust to compensate survivors.”
Attorneys say that filing separate civil suits against the local councils is a way to keep the pressure on. However, an injunction issued in the bankruptcy case has halted all civil cases against local councils until May 18. Attorneys expect that blackout period may be extended.
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At the same time, lookback windows designed to allow sexual abuse claims otherwise barred by statutes of limitations are closing in several states; Hawaii’s closed last month and Montana’s closes Wednesday.
“We’re filing it to put them on notice that if the Montana council doesn’t come into the bankruptcy process and help contribute to making this right for the people who were abused in their care, whenever national Boy Scouts’ bankruptcy process winds down, we’ll be able to pick up this litigation in Montana state court on behalf of our clients,” said Andrew Van Arsdale, an attorney with Abused in Scouting.
The complaint filed Tuesday asserts that BSA Montana Council’s confidential records, part of the organization’s “ineligible volunteer files” listing suspected or accused child abusers, demonstrate it’s long been aware of abuse within scouting.
In one of the cases filed by Janci last month, the accused is named in those files, commonly known as the “Perversion Files.” He was charged with child sexual abuse but continued to be listed as a district member at large for another seven months before he was entered into the files and barred from registering as a scout leader or volunteer. In the meantime, the man entered a deferred prosecution agreement with the state of Montana.
“It’s not just that they hold purse strings, it’s their participation, too,” Janci said. “The local councils supervise the camps, they’re the ones who work with the Boy Scouts to refer people to the secret file system. They’re involved every time a secret file is created.”
“The idea they’re not equally culpable for the abuse inflicted on so many people is just not credible.”
The national versus local issue likely will continue to be a point of contention as the bankruptcy case moves forward.
On Monday, the case hit another potential snag. In federal court in Delaware, Judge Laurie Silverstein held a hearing to review Century Indemnity Company’s objection to work being done on the case by Sidley Austin, a corporate law firm retained by Boy Scouts. The insurance company argued that it is a conflict of interest since it previously worked with Sidley Austin in a dispute over insurance payouts involving Boy Scout sexual abuse claims.
Sibley represented Century in a dispute with Lloyd’s of London over reinsurance Century purchased from Lloyd’s to help cover major claims events. Lloyd’s refused to reimburse Century for settlements in Boy Scout sexual abuse cases, leading to a lengthy legal dispute.
In recent years, the Boy Scouts have battled with insurance carriers who refused to pay out claims, saying the Scouts failed to take effective measures to prevent continued abuse. In 2018, Boy Scouts sued six of its carriers including Century. Experts include insurers’ refusal to pay out claims as one of the driving factors leading Boy Scouts to file for bankruptcy.
Though Sidley didn’t represent Century in the Scouts’ suit against them, Century’s attorneys have argued that Sidley understands the playbook from the Lloyd’s of London case, and will successfully help the Boy Scouts demand that Century cover large payouts to victims in the bankruptcy proceedings.
If Sidley Austin is disqualified, that could delay for the bankruptcy case. That hearing resumes Wednesday.
Later this month, attorneys expect an agreement on a deadline for sexual abuse survivor’s claims to be filed to be considered in the bankruptcy proceedings. Initially, the Scouts proposed a short, 80-day window. The process for filing those claims likely also will be finalized. Boy Scouts said in a statement that a motion that “outlines the communications that will be sent out and published so survivors can submit claims” was filed Monday.
Sexual abuse survivors who do not file claims before the deadline not only would miss out on settlement money through the bankruptcy proceedings but will not be able to sue the national organization if it reemerges.