The Boy Scouts of America, facing thousands of lawsuits over alleged sexual abuse, filed for bankruptcy on Tuesday.
The Chapter 11 filing “sets in motion what could be one of the biggest, most complex bankruptcies ever seen,” reports the Associated Press, noting that “lawyers are seeking settlements on behalf of several thousand men who say they were molested as scouts by scoutmasters or other leaders.”
In an early-morning statement, BSA president and CEO Roger Mosby apologized “to anyone who was harmed during their time in Scouting.”
“We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” Mosby wrote.
“While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process … will provide equitable compensation to all victims while maintaining the BSA’s important mission.” He vowed that scouting programs “will continue … for many years to come.”
Chapter 11 will put the lawsuits on hold, but it’s likely the BSA will eventually be forced to sell its “vast property holdings,” the AP says, to create a compensation trust fund for victims. But it also puts pressure on alleged victims, who must come forward soon — likely within months — to seek compensation.
The filing comes at a perilous, turbulent time for the 110-year-old organization, which has seen its juvenile membership drop by more than a quarter in the past decade.
During that same time-span, says the Washington Post, “lawsuits and media investigations have revealed internal Boy Scouts documents detailing generations of alleged abusers accused of preying on Scouts.”
One lawyer who says he represents 300 alleged victims calls it “a day of reckoning” for the BSA.
“In a way, this is an acknowledgment finally on the part of the Boy Scouts that they had this enormous problem and the problem is so large that they can’t deal with it themselves,” the attorney, Michael Pfau, told the Post.
“Amid the crush of lawsuits, the Scouts recently mortgaged the major properties owned by the national leadership, including the headquarters in Irving, Texas, and the 140,000-acre Philmont Ranch in New Mexico, to help secure a line of credit,” the AP says. The latest tax filings show the national BSA has $1.4 billion in assets.
Yet most of Scouting’s assets belong not to the BSA, but to local scouting councils.
“These regional groups hold roughly 70% of the Boy Scouts’ wealth,” according to a Wall Street Journal analysis published last month, which revealed that “almost 400 nonprofits” — the local councils — are registered with the IRS under the BSA umbrella.
The Scouts are the latest in a growing list of major American institutions in trouble over sexual abuse, including many Roman Catholic dioceses, USA Gymnastics and universities like Penn State and Michigan State, which have paid out hundreds of millions of dollars in recent years.