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Boy Scouts of America settles for $850 million with more than 84,000 sexual abuse victims

A statue outside the Boy Scouts of America headquarters in Irving, Tex. (LM Otero/AP)
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The Boy Scouts of America reached an $850 million settlement Thursday with tens of thousands of people who say they were sexually abused when they were Scouts over decades and later sued in a case that rocked the historic institution.

The settlement, which came after the organization filed for Chapter 11 bankruptcy last year while facing mounting legal costs over the abuse claims, is one of the largest of its kind in a child sexual abuse case in U.S. history. The lawsuit involved more than 84,000 people who claimed sexual abuse dating as far back as the 1960s.

The agreement — the first legal settlement in a litany of lawsuits against the Boy Scouts — is more than double the group’s initial proposal to victims in March. The organization is facing roughly 275 abuse lawsuits and 1,400 potential claims.

The settlement notes that local councils are expected to contribute to the settlement fund, with court records showing that the groups are mandated to pay at least $300 million. The deal also calls for commitments to abuse victims that include youth protection measures, a reporting system and the formation of a Child Protection Committee.

The Boy Scouts said in a statement to The Washington Post that the settlement was an “encouraging and significant step forward” and reflected the institution’s “ongoing efforts to reach a global resolution that will equitably compensate survivors and ensure Scouting’s future by resolving past abuse cases for both the national organization and local councils.”

Ken Rothweiler, an attorney for a group of survivors, championed the agreement as historic.

“I am pleased that both the BSA and their local councils have stepped up to be the first to compensate the survivors,” Rothweiler said in a statement. “We will now negotiate with the insurers and sponsoring and chartering organizations who have billions of dollars in legal exposure, of which a substantial portion is necessary to fairly compensate the survivors.”

But while the settlement was celebrated by some, other lawyers involved in the lawsuit said the deal would fall far short of what abuse survivors deserve. Tim Kosnoff, a lawyer who had partnered with Rothweiler’s firm in the suit, said to NPR that the agreement, which is not yet finalized, was a “rotten, chump deal” and a “failure.”

Jason Amala, a lawyer whose firm represents more than 1,000 men who say they were sexually abused by Boy Scouts leaders and volunteers, said he will object to the BSA’s proposal.

“We’re very concerned,” Amala told The Post. “It equals less than $10,000 per survivor. They’re not offering that much more than they were in the last proposal, and nobody’s explaining why every survivor should be happy about this.”

At issue, he said, is the lack of transparency around how much each of the Boy Scouts’ nearly 300 local councils are worth and contributing to the settlement. Without that information, he said, there’s no way of knowing whether survivors are getting a fair settlement.

Lawyer Irwin Zalkin, who also represents abuse survivors, agrees.

“A basic principle of bankruptcy is there must be transparency,” Zalkin said. “If you want a release of all liability forever, you've got to show, to demonstrate that you're bankrupt or you're at serious risk. You’ve got to show us what you’ve got.”

Amala and Zalkin said their firms, along with dozens of others representing survivors, will oppose what they say is a lack of transparency around the new proposal.

“This is not the end of the story,” Zalkin told The Post.

Attorney Evan Smola, of Chicago-based Hurley McKenna and Mertz, who negotiated the settlement proposal, said he’s confident details about the councils will be made public. The court filing states that each council’s cash and property contributions should be detailed in the disclosure statement.

“It'll absolutely be disclosed and clear to abuse survivors,” Smola said.

He also stressed that he sees the $850 million settlement as a “small piece of the puzzle,” and not the end of the road for survivors.

“Negotiations will continue, but we think this is a productive and important first step,” Smola said. “This is not perfect, but it’s good. And it should, in our view, have the support of victims.”

The Boy Scouts , based in Irving, Tex., had said its two goals during bankruptcy protection were to “equitably compensate victims who were harmed during their time in Scouting and continue carrying out its mission for years to come.”

Boy Scouts releases sex-abuse bankruptcy plan, with $300 million coming from local councils

Both lawyers for the victims and the Boy Scouts’ insurers said in March that they were unsatisfied with the organization’s initial plan to compensate tens of thousands of former Scouts who allege they were sexually abused. The group’s total assets, which are estimated at $1 billion and include four high-adventure bases, made the original plan look “woefully insufficient” amid the staggering number of claims, Michael Pfau, a lawyer who represents about 1,000 people who have filed abuse claims in bankruptcy court, previously told The Post.

In November, after a deadline passed for victims to file abuse claims in bankruptcy court, a lawyer representing the Boy Scouts of America said the organization needed to reach a settlement by this summer — or risk running out of the necessary cash to continue operating. The Boy Scouts told The Post on Friday that it aims to emerge from Chapter 11 proceedings by “late this year.”

Attorneys for the Boy Scouts outlined a restructuring in the support agreement for survivors in court documents Thursday.

“After months of intensive negotiations, the debtors have reached resolution with every single official and major creditor constituency in these Chapter 11 cases,” the organization’s attorneys wrote.

But attorneys for some insurance companies also accused the Boy Scouts of bending to the attorneys of abuse victims so that the terms of the restructuring agreement were more favorable to the survivors.

“With only the fox guarding the henhouse, the outcome is utterly at odds with what BSA itself asserted was necessary for a confirmable plan and is permissible under the bankruptcy code,” the insurers wrote in a Thursday filing.

A hearing in the case is scheduled for July 20.

The Boy Scouts said the group remains “wholeheartedly committed to working toward a global resolution” regarding those who were sexually abused as Scouts. A 65-year-old survivor living in New York told NBC News that he was “gratified that the Boy Scouts are taking responsibility for the sexual abuse that occurred to me and others that we have had to live with for decades.”

“This acknowledgment by the Boy Scouts will start the process of healing for many of us who have suffered,” he said.

Samantha Schmidt contributed to this report.

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