A federal district court judge has upheld the approval of a $2.4 billion bankruptcy reorganization plan aimed at resolving tens of thousands of child sexual abuse claims against the Boy Scouts of America.
The ruling docketed Tuesday rejects arguments by non-settling insurance companies and attorneys representing dissenting abuse survivors that the reorganization plan was not proposed in good faith and improperly strips the insurers and survivors of their rights.
The ruling follows a September decision in which U.S. Bankruptcy Judge Laurie Selber Silverstein approved the plan. The plan would allow the Irving, Texas-based Boy Scouts of America to continue operating while compensating tens of thousands of men who say they were sexually abused as children while involved in Scouting.
More than 80,000 men have filed claims saying they were abused as children by troop leaders around the country. Plan opponents say the staggering number of claims when combined with other factors, suggests that the bankruptcy process was manipulated.
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While affirming Silverstein's description of the proceedings as "an extraordinary case by any measure," U.S. District Court Judge Richard Andrews found no fault with her ruling.
"Appellants argue on many fronts that the plan did not meet the requirements for confirmation, and I have carefully considered each of these arguments," Andrews wrote. "Based on the record, the appellants have failed to put forth evidence that would demonstrate clear error in the bankruptcy court's careful findings of facts."
The BSA issued a statement describing the ruling as "a pivotal milestone" that "solidifies a path forward for both survivors and Scouting."
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"We look forward to the organization's exit from bankruptcy in the near future and firmly believe that the mission of Scouting will be preserved for future generations," the statement added.
A spokesperson for attorneys representing several non-settling insurance companies had no immediate comment, but attorneys have previously suggested that the case could eventually reach the U.S. Supreme Court.
When it sought bankruptcy protection in February 2020, the BSA had been named in about 275 lawsuits and told insurers it was aware of another 1,400 claims. The huge number of claims filed in the bankruptcy was the result of a nationwide marketing effort by personal injury lawyers working with for-profit claims aggregators to drum up clients, according to plan opponents.
