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Bankruptcy Judge Presses Pause on Pending Boy Scout Lawsuits

The Boy Scout logo over a blurred out photograph of Boy Scouts saluting in the background.

If you obtain a PDF copy of United States Bankruptcy Judge Laurie Selber Silverstein’s Consent Order that she entered on March 30, 2020 regarding the Boy Scouts of America’s (BSA) Motion for Preliminary Injunction, you may be wrought with anxious tension to find that the entire document covers 100 pages. As you dive into what—on first appearance—seems to be a lengthy read on dry bankruptcy matters filled with numerous recitations of the words “Whereas” and “Debtor,” you soon find that the bulk of the order is actually not Judge Silverstein’s legal reasoning or analysis. Of the 100-page order, 76 of those pages are dedicated to listing the number of lawsuits and claims currently pending against BSA and its affiliated organizations and councils.

On February 18, 2020, the BSA announced that its national organization had filed for Chapter 11 bankruptcy to equitably compensate thousands of survivors who were sexually abused during their time as scouts. The organization intends to use the bankruptcy process to create a Victims Compensation Trust that will provide redress to those that were abused. However, BSA believes that it will be harmed if it has to actively defend hundreds of pending abuse actions while, at the same time, it tries to compensate victims through the bankruptcy process. A preliminary injunction would temporarily stop the pending actions from moving forward.

In her Order, Judge Silverstein explained:

The Court’s failure to grant preliminary injunctive relief would result in irreparable harm to the BSA. The BSA has demonstrated that the continued prosecution of the Pending Abuse Actions would deplete valuable estate assets otherwise distributable to creditors, potentially including [survivors who have brought lawsuits against the BSA and its related organizations and councils] …

The Order halts hundreds of pending abuse actions until May 18, 2020. That date may be extended if the parties mutually agree on it, but survivors in pending actions are allowed to voice their objections to any extension. Judge Silverstein also ordered the BSA to update the bankruptcy court every 30 days with the names of new lawsuits that have been filed against the BSA during the injunction period. A preliminary injunction is a significant remedy, especially one issued against survivors who have already experienced their own irreparable harm. Hopefully, in the end, this process will reveal that good things do come to those who wait.

The qualified attorneys at Aylstock, Witkin, Kreis, and Overholtz represent survivors who were sexually abused during the time with the Boy Scouts of America. Please contact us to receive more information.

 

Sources:

In re: Boy Scouts of America and Delaware BSA, LLC, Case 20-50527-LSS (Del. Bankr. Mar. 30, 2020) (Doc. 54).

https://www.scoutingnewsroom.org/press-releases/the-boy-scouts-of-america-files-for-chapter-11-bankruptcy-to-equitably-compensate-victims-while-ensuring-scouting-continues-across-the-country/