UPDATE (Feb. 18, 12:38 p.m. PT) — The national office of the Boy Scouts of America filed Chapter 11 bankruptcy in federal court on Monday.
At the same time the scouting organization formally sought bankruptcy protection, its national chair Jim Turley released a statement.
“On behalf of myself and the entire Scouting community: I am sorry. I am devastated that there were times in the past when we failed the very children we were supposed to protect,” Turley wrote.
The filing does not mean they are going out of business. Lawyers familiar with the case say it’s a means of condensing numerous pending sexual abuse cases around the country.
“It’s to bring all of the claims that are pending against the national organization into one court and one process,” said Peter Janci, an attorney with Crew Janci Law Firm in Portland.
Crew Janci LLP represents hundreds of victims of abuse and were part of the team in the 2010 Kerry Lewis v. Boy Scouts of America lawsuit which resulted in a $19.9 million verdict for the victim.
The BSA have been aware of sexual abuse cases for more than a century. The scouting organization began in 1910 and by the early 1920s, they were already keeping secret files documenting sexual molestation.
Later versions of those files are now called the “Perversion Files.” As a result of the 2010 lawsuit, thousands of those files were released to the public for the first time.
“They have tens and tens of thousands of them at one time. They’ve destroyed many of them,” Janci said. “But we know that this is a very long-standing problem, involving a systemic problem of abuse that has affected what we estimate is likely over 100,000 victims over the course of scouting’s history in the United States.”
In his open letter, Turley announced a part of the Scouts’ restructuring plan will be the creation of an independent account to pay claims.
“Specifically, the national organization of the Boy Scouts of America has initiated a voluntary financial restructuring to ensure we can equitably compensate all victims of past abuse in our programs, through a proposed Victim’s Compensation Trust,” Turley wrote.
“I encourage you, and all victims to come forward and file claims so you can receive compensation from this Trust,” Turley’s statement continued.
The move by BSA is reminiscent of how the Catholic Church responded to claims when they surfaced across the country. According to Bloomberg Businessweek, the dioceses have used bankruptcy as a strategy more than 20 times as a means of ensuring “a quieter mass settlement that forces an end to existing lawsuits and blocks new ones.”
According to Janci, public tax records show the Boy Scouts of America has more than $1 billion in assets, not including the balance sheets of local chapters.
“This is not an organization that is not in a position to take care of victims that they allowed to be harmed,” he said. “And it’s our view that they should have to make good on those obligations.”
But the bankruptcy filing does instill a sense of urgency for individuals seeking justice. Lawyers are urging victims who haven’t come forward and have never sought help to do so now. They say it is likely that if they don’t participate in this process that they may be barred from doing so in the future.
Another similarity to the Catholic Church is lawmakers across the country including New York, New Jersey and California have changed their statutes of limitations to make it easier for victims to bring claims. In California, victims can bring claims regardless of how long ago the abuse happened.
“We’ve definitely been contacted by people in their eighties,” Janci said. “I’ve heard that there are a couple people in their 90s. We know that the problem goes back in the organization until the very beginning.”
The filing presents many questions including what happens to the local chapters. Janci said BSA has indicated that they want their local chapters to have protection from future suits.
“It’s our view that if they are going to get that type of protection, then they should have to contribute to the compensation fund for victims,” Janci said.