Facing substantial mass-tort liabilities arising out of thousands of claims alleging that the organization failed to protect children from sexual abuse, the Boy Scouts of America filed for Chapter 11 bankruptcy in February 2020. The Boy Scouts’ stated goal was to use the Chapter 11 process to create a trust to provide compensation to victims. On September 8, 2022, following years of negotiations among more than a dozen stakeholder groups, 59 hearings, and a 22-day confirmation trial, the bankruptcy court confirmed a Plan of Reorganization over the objection of dozens of insurers. The U.S. District Court affirmed the decision on March 28, 2023.
In this complex and historic bankruptcy, Gilbert LLP represents the court-appointed representative for certain abuse victims in the Chapter 11 proceeding, providing counsel and advice to that group on insurance issues, and working with key stakeholders to evaluate, preserve, and maximize insurance recoveries for the benefit of injured claimants. The confirmed plan provides $2.46 billion (including $1.6 billion in insurance settlements) to a trust benefiting survivors of abuse and the rights to pursue coverage potentially worth billions more.
Following the court’s approval of Boy Scouts’ plan of reorganization, Gilbert LLP was retained as counsel in mid-2023 for the BSA Settlement Trust, using its expertise and experience from the bankruptcy to pursue and maximize the Trust’s insurance assets and implement the plan.