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Boy Scouts of America mulling bankruptcy in face of paying damages from sex-abuse lawsuits

The youth organization has reportedly hired a firm specializing in Chapter 11 filings

Image source: YouTube screenshot

The Boy Scouts of America is considering filing for bankruptcy as the youth organization faces paying damages to victims in several sex-abuse lawsuits.

According to the Wall Street Journal, leaders of the 108-year-old institution have secured the services of law firm Sidley Austin LLP for assistance as they consider the prospect of a Chapter 11 reorganization.

What are the details?

The Boy Scouts face an undisclosed number of sexual assault and negligence lawsuits from former scouts, employees, and volunteers stemming from instances that in some cases occurred decades ago. As the organization assesses its financial health moving forward, the anticipated payouts to those victims are reportedly a significant factor in future planning.

In a letter sent to employees on Wednesday, Chief Scout Executive Michael Surbaugh said that the organization is "working with experts to explore all options available to ensure that the local and national programming of the Boy Scouts of America continues uninterrupted."

Surbaugh acknowledged the institution's "social and moral responsibility to fairly compensate victims who suffered abuse during their time in Scouting," while also keeping the organization and its commitments afloat.

The National Council of the Boy Scouts of America determined in its 2017 annual report that if the claims for damages in the lawsuits aren't covered by its general liability insurance, "the total amount of payments to resolve current and future claims could have a significant impact on the financial position or results of operations of the National Council in the future."

The Journal reported that BSA has had to sued its insurers twice since 2013, over their refusal to cover costs related to previous lawsuits against the organization.

Anything else?

In addition to sex-abuse lawsuits, the organization has struggled with declining membership numbers for decades. Reuters reported last month that a recent count put Boy Scouts membership numbers at around 2.28 million nationwide — which is less than half the number of boys enrolled during the organization's peak in the 1970s.

BSA announced that starting in 2018, it would begin allowing girls into its Boy Scouts program for 11- to 17-year-olds and will be changing the name to Scouts BSA. The name change sparked a lawsuit from the Girl Scouts of the United States of America, who accuse the BSA of trademark infringement and brand confusion.

One last thing…
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