Tort Claimants' Committee for Boy Scouts of America Bankruptcy Rejects Proposed Settlements

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Sep 15, 2021, 12:54 ET

LOS ANGELES, Sept. 15, 2021 /PRNewswire/ -- On September 14, 2021, the Official Tort Claimants' Committee (TCC) in the chapter 11 bankruptcy of the Boy Scouts of America (BSA) announced that it does not support the BSA's proposed settlements with Hartford Insurance Company ($787 million) or The Church of Jesus Christ Latter Day Saints ($250 million). The TCC, represented by Pachulski Stang Ziehl & Jones LLP (PSZJ), views the settlements as grossly unfair to the 82,500 survivors who were sexually abused as children. The TCC was appointed by the Office of the United States Trustee as the official representative for all survivors of childhood sexual abuse and it will not sell out survivors for a quick pay that does not deliver the justice they deserve.

The TCC calls attention to major flaws contained in the proposed settlements. The Church of Jesus Christ Latter Day Saints (LDS) is not paying reasonable compensation for the broad releases of the sexual abuse claims that occurred in local councils controlled by LDS. LDS had direct involvement in every aspect of the Scouting program. If approved, the proposed settlement yields an average $3,000 payment for each claim. Instead, the TCC maintains that LDS is being handed a "get-out-of-jail card" in exchange for an unreasonably low sum.

"As each month passes in this bankruptcy case, the Boy Scouts' bankruptcy becomes less about the survivors and more about how the Boy Scouts will exit bankruptcy at the expense of survivors," added Doug Kennedy, Vice Chair of the TCC. "It will be up to the Tort Claimants' Committee to continue advancing the interests of survivors because the Boy Scouts, local councils, chartered organizations, and their insurers are unwilling to do the work necessary to reach a resolution that is fair to survivors."

Likewise, Hartford Insurance Company is not paying amounts commensurate with its coverage risk. Hartford Insurance Company increased its inadequate offer of $650 million to an equally subpar offer of $787 million. Hartford's new offer yields an average of less than $9,500 per survivor.

"The Tort Claimants' Committee investigated Hartford's exposure and it has the ability to fairly compensate survivors without jeopardizing its financial condition," said John Humphrey, Chair of the TCC. "As Chairman of the TCC, I cannot in good conscience support the release of a major insurance company for cents on the dollar."

The TCC originally supported a restructuring settlement agreement for a consensual plan because the BSA and the "Coalition of Abused Scouts for Justice" confirmed that the primary value for survivors would be recovered through the billions in available insurance coverage. However, over the past two months, the BSA and the Coalition have changed their course and are now seeking a quick exit from the bankruptcy case by entering into settlements with Hartford and LDS that fail to capture the billions owed to the sexual abuse claims of survivors.

"In a case where half of the abuse includes multiple instances of penetration and masturbation of children, payments in the range of $10,000 - $12,000 do not begin to justly compensate survivors," said James Stang of PSZJ. "The Tort Claimants' Committee will oppose the LDS and Hartford settlements and any other settlements that fail to compensate survivors fairly," Stang added.

More information on the restructuring can be found at https://www.pszjlaw.com/creditor-125.html.

SOURCE Pachulski Stang Ziehl & Jones