Boy Scouts sex abuse deal draws more opposition from bankruptcy watchdog

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An Eagle Scout patch is pictured in Orlando, Florida in this May 30, 2012 file photograph. REUTERS/David Manning

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  • US Trustee calls abuse claims review option ‘illusory’
  • Objection comes as scouts approach final settlement hearing

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(Reuters) – The U.S. Justice Department’s bankruptcy watchdog, the U.S. Trustee, on Friday expanded its list of complaints about the Boy Scouts of America’s proposed sexual abuse settlement, challenging a new provision of the agreement which he said could be costly for abuse plaintiffs.

US administrator Andrew Vara’s latest objection to the deal comes weeks before the youth organization is expected to argue for Alabama Bankruptcy court approval of its reorganization plan and underlying settlement for sexual abuse, which includes a $2.7 billion trust to compensate abuse claimants. Vara had already filed an objection in early February, challenging the plan’s legal protections for Boy Scouts insurers and local councils, among others.

Since then, the Boy Scouts, which filed for bankruptcy in February 2020 to resolve decades of allegations from men who say they were sexually abused as children by troop leaders, have won critical support for the settlement of the part of the official committee representing survivors of abuse in the bankruptcy.

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In exchange for this support, the organization has added new child protection measures as well as what it calls an independent review process that aims to give survivors of abuse with particularly serious claims the opportunity to ask for higher payments.

Vara said that option, which could cost the plaintiff up to $20,000, is “illusory.” He also accused the organization of failing to explain how it calculated the fee, which he deemed “excessive and onerous”.

The US trustee argued that the independent review option, which would be overseen by a neutral third party, could create a situation where an abuse claimant pays the costs, gets a higher claim amount throughout the process , but sees this higher amount ultimately reversed by the settlement trustee.

Boy Scouts representatives and the committee did not immediately respond to a request for comment. A lawyer for the committee has previously said that part of the independent review fee could potentially be waived.

More than 82,000 abuse complaints have been filed against the Boy Scouts, who have apologized and pledged to fairly compensate survivors. The plan is currently backed by 73.57% of survivors who voted, just short of the 75% it aimed for. The Boy Scouts hope to convince some who voted against the plan to change their votes by March 7.

US Bankruptcy Judge Laurie Selber Silverstein is scheduled to hold a hearing on the plan on March 14.

The case is In re Boy Scouts of America, US Bankruptcy Court, District of Delaware, No. 20-10343.

For the Boy Scouts: Jessica Lauria, Mike Andolina, Matt Linder and Laura Baccash of White & Case; and Derek Abbott and Andrew Remming of Morris, Nichols, Arsht & Tunnell

For the US Administrator: David Buchbinder and Hannah McCollum

Read more:

Bankruptcy watchdog challenges legal shield in Boy Scouts abuse deal

Boy Scouts of America wins key support for sexual abuse settlement

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Our standards: The Thomson Reuters Trust Principles.

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at [email protected]

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