Joe Steinfeld joins the ABI panel:  Strategies and Perspectives.  The Boy Scouts of America Chapter 11:  The Intersection of Mass Torts and Bankruptcy. 

On May 23, 2024, Joe Steinfeld joined other nationally recognized bankruptcy attorneys in an informative webinar series that provides valuable insights into strategies used by stakeholders in the Boy Scouts of America chapter 11, a case that ultimately led to the nation’s largest sexual abuse settlement.  This settlement valued at $2.4 billion with the potential to grow to over $6 billion will provide long overdue compensation to the tens of thousands sexual abuse survivors while preserving the Boy Scouts as a national institution. 

This seminar is available for viewing at https://bsa.abi.org/. 

Exploring Why the Boy Scouts of America filed for Chapter 11 Bankruptcy:

Joe is one of the lead attorneys that formed the Coalition of Abused Scouts for Justice an ad hoc committee that represented the interest of more than 60,000 sexual abuse survivor claimants in the case.   Joe and the rest of the panel explain how the Coalition, the BSA, BSA member Charter Organizations such as the Catholic and Methodist Churches, over 250 BSA Local Councils, multiple insurance carriers and the Tort Claims Committee were able to unite disparate interests so that survivor claimants could receive as much compensation as possible, without the need to litigate cases in state court.  Joe explains this was critical because the survivor claimants suffered abuse beginning in the 1950s through the 1980s and as such were very aging population that could not wait for justice through endless litigation. 

The BSA itself was also facing  an existential crisis with unending litigation and the fact many states were enacting revival statutes of limitations that opened up tens of thousands of potential new claims.  

Mass Torts and Bankruptcy:

In many large mass tort cases bankruptcy filings are the result of a need to establish a compensation fund for victims while simultaneously protecting the organization from overwhelming legal liabilities.  The panel discusses how bankruptcy adds a layer of complexity to these claims, as the BSA and related parties’ assets and liabilities were subject to court oversight.  In this case the bankruptcy also provided opportunity to use controversial third-party releases to gather significant assets and insurance rights of related parties who themselves would have been subject to suit and ultimately might have had to file for bankruptcy. 

Policy Implications:

The panel also discusses how the Plan establishes a mandatory youth protection and oversight program that hopefully cures the problems that led to more than 80,000 instances of sexual abuse. Joe explains that for many abuse survivor claimants having the Boy Scouts finally recognize the pervasive failure to protect its youths and to implement meaningful reforms in this fashion was as important as the compensation to be paid.