The decision allows the Boy Scouts, hit by a spate of lawsuits last year, to go ahead with a proposed reorganization plan.
The Boy Scouts of America can enter into a landmark $ 850 million settlement that resolves thousands of complaints of child sexual abuse, after it has been approved by a US bankruptcy court.
Thursday’s ruling by Delaware Judge Laurie Selber Silverstein will allow the Boy Scouts to move forward with a proposed reorganization plan that would allow the group to emerge from bankruptcy before the end of the year.
Founded in 1910, the Boy Scouts filed for Chapter 11 bankruptcy protection in February 2020 after being hit by a spate of sexual abuse lawsuits.
After three days of testimony and argument, the judge granted the BSA’s request to enter into a settlement involving 250 local Boy Scout councils and attorneys representing 70,000 men who say they were sexually abused when they were young.
The agreement requires Boy Scouts and local councils to contribute $ 850 million to a fund for claimants of abuse.
The settlement was opposed by insurers that issued policies for Boy Scouts and local councils, attorneys representing thousands of other abuse victims, and several church denominations that have sponsored local Boy Scout troops.
The judge refused to grant a request that the Boy Scouts be allowed to pay millions of dollars in legal fees and attorneys’ expenses hired by law firms representing tens of thousands of abuse plaintiffs.
Silverstein denied the BSA’s request under the agreement for permission to withdraw from an April settlement in which insurance company The Hartford would pay $ 650 million into the abuse claimant fund in exchange for being released from any additional liability.
Under the agreement, the Boy Scouts would contribute up to $ 250 million in cash and property to a fund for victims of child sexual abuse. Local councils, which run the daily operations of Boy Scout troops, would contribute $ 600 million.
Additionally, the national organization and local councils would transfer their rights to Boy Scout insurance policies to the victim fund. In return, they would be released from future liability for abuse claims.
The judge rejected two controversial provisions of the agreement highlighted by opponents.
Unless the Boy Scouts reach a resolution with the insurers, they will likely continue to fight over the final bankruptcy plan.