Boy Scouts of America bankruptcy agreement might affect churches who charter troops now or have in the past


October 16, 2020


Churches with a past or current affiliation with Boy Scouts of America may need to consider their next steps related to the national organization’s plan to deal with future allegations of child sexual abuse.

“The Boy Scouts of America organization is presently involved in a bankruptcy reorganization under Chapter 11. The goal is to work with their insurance carriers to develop a plan for handling claims against the BSA, including claims related to sexual assault,” said James “Jaime” Jordan, an attorney with Guenther, Jordan and Price.

The Tennessee legal firm advises the Alabama Baptist State Board of Missions. Jordan has also served as the state convention parliamentarian for many years.

Chapter 11 is a form of bankruptcy that involves reorganizing a debtor’s business affairs, debts and assets so that the business can continue to operate. “We think the plan will involve the creation of a trust funded by the BSA and its insurors. Any claims against the BSA will be paid from this trust, if at all. Under such an arrangement, the BSA and insurance companies would be protected against future claims, except for any obligations under this trust,” Jordan said.

‘What ifs’

Thinking about “what ifs,” Jordan discussed a scenario in which a church that currently sponsors or has sponsored a BSA troop in the past could find itself standing alone someday to face a claim from a former scout. The BSA’s obligation to defend the church or to provide insurance coverage will likely be extinguished by the bankruptcy proceeding. The church’s only remedy may be to look to the trust for help, and Jordan is concerned about whether help will be available if the church did not file a claim with the bankruptcy court.

Nov. 16 is the filing deadline for abuse claims against BSA, and Jordan said churches may want to seek legal counsel to determine whether they need to file a timely claim, as a sort of “placeholder,” Jordan said.

“Out of an abundance of caution, if a church chartered or sponsored a BSA organization, it may wish to seek legal counsel about filing a claim in the BSA proceeding, even if it does not presently know whether it will have any claims,” Jordan said. Boy Scouts of America filed for Chapter 11 bankruptcy in February after paying more than $150 million in settlements related to sexual abuse between 2017 and 2019.

More than 12,000 boys have alleged abuse by scoutmasters or other leaders since the 1920s, according to court testimony reported by several news outlets.

Past abuse claims

Most of the alleged abuse dates to the 1960s, ’70s and ’80s, prior to the BSA’s implementation of youth protection plans that require mandatory criminal background checks for all leaders, mandatory reporting of abuse allegations and required training in youth protection.

At the time of BSA’s bankruptcy filing, the organization held more than $1 billion in assets, according to a New York Times report. Much more is held by more than 250 local councils.

Alabama troops are members of eight local councils, including the Greater Alabama Council, headquartered in Birmingham; the Black Warrior Council, headquartered in Tuscaloosa; the Mobile Area Council; the Tukabatchee Area Council, headquartered in Montgomery; and several councils that serve troops in Alabama and neighboring states.

More information on the BSA proceedings is available at officialBSAclaims.com.


By Carrie Brown McWhorter

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