“The only winners in this latest proposal are the Boy Scouts, their local councils, the Mormon Church, and the Hartford insurance company,” Michael Pfau, an attorney whose firm represents more than 1,000 abuse claimants in the bankruptcy, said in a prepared statement.
“The Boy Scouts are offering abuse survivors a fraction of what their cases are worth and the assets available to pay them,” Pfau added. “The Mormon church is reported to have roughly $100 billion in assets, but it is offering a paltry $250 million to compensate the thousands of abuse survivors who were abused in Mormon Boy Scout troops by Mormon Scout leaders.”
The proposed settlements will be incorporated into a new reorganization plan that attorneys for the Boy Scouts were expected to file late Tuesday night.
The new agreement with The Hartford was negotiated after the bankruptcy judge last month rejected two key provisions of an $850 million deal that the BSA had reached with attorneys representing a majority of abuse claimants.
Judge Laura Selber Silverstein denied the BSA’s request as part of that deal for permission to withdraw from a previous $650 million settlement it had reached with The Hartford. The Boy Scouts sought to withdraw from that April agreement after attorneys for abuse claimants repeatedly insisted that their clients would never vote for a reorganization plan that included it.
Silverstein also rejected a proposal for the Boy Scouts to pay millions of dollars in legal fees and expenses of attorneys hired by a coalition of law firms that represent tens of thousands of abuse claimants. The judge noted that any such payment would come out of the pockets of abuse claimants themselves.
The new settlement with The Hartford was the product of negotiations that included attorneys representing an ad hoc group called the Coalition of Abused Scouts for Justice. Law firms affiliated with the group represent more than 60,000 sex abuse claimants.
“These are very significant developments,” said Ken Rothweiler, whose law firm is affiliated with the coalition and represents roughly 16,800 abuse claimants.
The proposed settlements, coupled with the $850 million contribution from the BSA and local councils, would bring the fund for abuse claimants to almost $1.9 billion. If the plan is approved, it would represent one of the largest sex-abuse settlements in U.S. history.
Meanwhile, the official victims committee has estimated the total liability exposure of Boy Scouts insurers for abuse claims at more than $100 billion.
The committee supported the previous arrangement, which called for the earlier settlement with The Hartford to be scrapped and for the Boy Scouts and local BSA councils, which run day-to-day operations for Boy Scout troops, to contribute $850 million and their rights to insurance policies to the fund for abuse claimants. The committee noted that the primary value for abuse survivors under that deal would come from available insurance coverage.
Insurance companies pushed back hard against that plan, arguing that the proposed transfer of insurance rights unlawfully stripped them of their ability to question claims and improperly allowed the trustee overseeing the victims fund to determine what insurers owed without being challenged. Insurers also questioned a provision allowing expedited payments of $3,500 from the fund to resolve abuse claims, no questions asked.
Sophia Eppolito, a Report for America corps member based in Salt Lake City, contributed to this report.