The declaration sets the stage for what could be one of the country’s most complicated bankruptcy cases in history, lawyers say, and raises questions about the possible impact on local Boy Scout councils, which are independently corporated and offer programming to troops across all 50 states and U.S. territories. In the bankruptcy petition, the organization reported $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities.
“The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting,” Roger Mosby, the president and chief executive of the Boy Scouts of America, said in a statement released at about 1 a.m. Tuesday, shortly after the filing. “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process — with the proposed Trust structure — will provide equitable compensation to all victims while maintaining the BSA’s important mission.”
The filing punctuates a tumultuous time for the 110-year-old organization, which continues to be one of the largest youth groups in the United States and an iconic but fading symbol of American culture.
Youth membership has declined more than 26 percent in the past decade. This dramatic drop in numbers, coupled with the loss of a key partnership with the Church of Jesus Christ of Latter-day Saints, has left the Boy Scouts struggling to find ways to remain relevant among increasingly busy children and parents. Last year, it began accepting girls into its namesake program, setting off a recruitment war with the Girl Scouts.
Meanwhile, over the past decade, lawsuits, investigations and media reports have revealed internal Boy Scouts documents detailing generations of alleged abusers accused of preying on Scouts. An investigator hired by the Scouts said last year that her team had identified 12,254 victims and 7,819 perpetrators in internal documents from 1946 through 2016.
Amid other high-profile child abuse scandals and the #MeToo movement, several states and the District have overhauled their statute-of-limitations laws on child sexual abuse, opening the door to scores of potential lawsuits against the Boy Scouts. Lawyers across the country have begun representing hundreds of clients and have filed lawsuits in states such as New York and Pennsylvania.
“In a way, this is an acknowledgment finally on the part of the Boy Scouts that they had this enormous problem and the problem is so large that they can’t deal with it themselves,” said Michael Pfau, a lawyer who said he represents about 300 alleged victims. “It is a bit of a day of reckoning for the Boy Scouts.”
But a bankruptcy filing may also limit alleged victims’ ability to “have their story heard in court and their claim ultimately decided by a jury of their peers,” Pfau said.
Pamela Foohey, an associate law professor at Indiana University who specializes in bankruptcy issues, said the proceedings could allow alleged victims to have a collective voice and to negotiate with the Boy Scouts and its insurance companies to figure out how much property the organization truly has and how much compensation should be paid out.
But given the deadline for claims, which could come within months of the filing, the bankruptcy process might require alleged victims to come forward before they feel ready to do so, Foohey said.
“If you’re not ready to come forward by then … then you do lose your claim, and you lose your voice,” Foohey said. “That’s part of why bankruptcy is useful for the Boy Scouts. It cuts off the claims."
In an open letter, Jim Turley, national chair of the Boy Scouts of America, encouraged victims to come forward and file claims so they can receive compensation.
“We will provide clear notices about how to do so,” he wrote. “I want you to know that we believe you, we believe in compensating you, and we have programs in place to pay for counseling for you and your family by a provider of your choice.”
Experts drew parallels between the Boy Scouts and other embattled institutions that have used bankruptcy to handle costly lawsuits over abuse allegations. Numerous Catholic dioceses filed for bankruptcy after clergy were accused of sexually abusing children. USA Gymnastics filed for bankruptcy in 2018 as it faced 100 lawsuits from more than 350 sexual assault victims of team physician Larry Nassar.
A key question will be whether the Boy Scouts of America will be able to protect the assets of the local councils, which own camps and properties in prime real estate across the country. The local councils hold 70 percent of the Boy Scouts’ wealth, according to a Wall Street Journal analysis.
The Boy Scouts of America said no local council assets will be directly affected by the filing, and the national organization is working to protect local councils’ interests.
In the D.C. area, the National Capital Area Council is among the largest in the country, serving more than 55,000 youth members. It also owns a number of camping properties, including the Goshen Scout Reservation and Camp William B. Snyder in Virginia, as well as the Camp Howard M. Wall in the U.S. Virgin Islands, which is part of the council.
“National Capital Area Council, BSA has not filed for bankruptcy. Meetings and activities, district and council events, other Scouting adventures and countless service projects are taking place as usual,” said Craig Poland, the council’s scout executive and chief executive. “In short, there should be no change to the local Scouting experience.”
Pfau and other lawyers bringing abuse lawsuits against the Boy Scouts said they were skeptical that the organization would be able to shield the local councils entirely.
“That is wishful thinking, because in every Boy Scout case we file, the local councils are named,” along with the local sponsoring organizations, such as churches or schools, Pfau said. Many of these institutions could be implicated in the claims, making for an even more complicated bankruptcy case, said Pfau, who specializes in representing victims in abuse cases against institutions such as the Boy Scouts and Catholic dioceses.
In the same way that Catholic dioceses filed for bankruptcy rather than individual parishes, the Boy Scouts of America national organization is the entity that is filing, Foohey said. The local councils are legally and financially independent.
“It’s hard to tell exactly who’s on the line for some of these claims,” Foohey said. “The Boy Scouts organization is not very transparent about how it’s set up.”
The bankruptcy process, she said, could help bring more transparency.