Boy Scouts insurers seek to delay $2.5 billion abuse deal, bankruptcy exit

8:51 pm Friday, March 31st, 2023

By Dietrich Knauth

(Reuters) – A group of Boy Scouts’ insurers on Friday asked a judge to delay the youth group’s exit from bankruptcy to allow them more time to appeal a record-setting $2.46 billion settlement of sexual abuse claims.

More than a dozen insurers, including Liberty Mutual Insurance Company, have said the Boy Scouts’ bankruptcy settlement puts them on the hook for paying “thousands of invalid and questionable claims.”

U.S. District Judge Richard Andrews in Wilmington, Delaware, rejected the insurers’ initial appeal on Tuesday, finding the settlement was a good faith effort to resolve claims by more than 80,000 men who say they were abused as children by troop leaders.

The insurers argued Friday that the 3rd U.S. Circuit Court of Appeals must weigh in before the Boy Scouts move ahead with a settlement that “may become a template” for handling insurance on other cases involving large numbers of individual plaintiffs.

The Boy Scouts have agreed to contribute insurance rights worth up to $4 billion to the settlement fund that will pay abuse claims. Those insurance payments are in addition to the $2.46 billion already contributed to the fund by the Boy Scouts organization, its two largest insurers, and organizations that have chartered Scouting units and activities, including churches.

The Boy Scouts settlement, approved in bankruptcy court in September, was supported by 86% of abuse claimants and the Boy Scouts’ two largest insurers.

The Boy Scouts organization said Friday it would oppose any effort to delay bankruptcy exit.

“We look forward to emerging from bankruptcy in the near future, providing equitable compensation for survivors and safeguarding the future of Scouting,” the Boy Scouts said in a statement.

The Boy Scouts filed for bankruptcy in February 2020 after several U.S. states enacted laws allowing accusers to sue over decades-old abuse allegations.

(Reporting by Dietrich Knauth; Editing by Chris Reese)