As a Nov. 16 deadline looms for abuse survivors to come forward to make claims in the Boy Scouts of America bankruptcy, a judge’s ruling could allow the case to become the largest-ever child sexual abuse case against a single national organization.
Late last week, U.S. Bankruptcy Judge Laurie Selber Silverstein allowed the Coalition of Abused Scouts for Justice to join mediation discussions, giving a group representing 28,000 clients a say in any future settlement.
So far, 7,300 accusers represented by the 10 law firms in the coalition have signed consent forms allowing the attorneys to negotiate on their behalf. More are expected to sign before the November deadline to file proof of their allegations.
That means tens of thousands of accusers, who are considered creditors in the bankruptcy proceeding, could vote on any settlement with the Boy Scouts.
“In the end it comes down to … the votes of the survivors, so if you have the majority of the survivors, your votes can confirm a plan,” said Philadelphia attorney Ken Rothweiler, who as part of the group Abused in Scouting represents 13,000 claimants. “Anybody that has the most claimants, it puts them in a very advantageous position.”
Attorney Tim Kosnoff, left, speaks during a press conference held by the Abused in Scouting legal team after filing a lawsuit against Boy Scouts in Pennsylvania. (Photo: Win McNamee, Getty Images)
Boy Scouts of America filed for bankruptcy in federal court in Delaware in February amid mounting liability from abuse cases, estimating it faced 275 lawsuits in state and federal courts around the country plus another 1,400 potential claims – a number dwarfed by activity in the months since.
More: How an accused child molester gained access to children through youth organizations
In recent years, thousands also have said they were abused by by Catholic priests. Those cases have been filed against individual dioceses, however, obscuring how many total claims the church has faced.
In initial filings, Boy Scouts were the ones who proposed the creation of the Victims Compensation Trust, but the youth organization has not yet suggested how much money would be set aside for it.
The bankruptcy process is ill-suited to deal with these types of cases, said Marci Hamilton, chief executive officer of CHILD USA, a nonprofit think tank that works to prevent child abuse. Hamilton has been studying abuse cases in Boy Scouts based on data shared by Abused in Scouting.
“The goal of federal Chapter 11 bankruptcy is to be able to reorganize your assets to put a lid on any kind of future claims by people you currently owe,” she said. “It never was intended for child sex abuse.”
But Hamilton said it has become the “go-to model for organizations with large numbers of victims,” like the Catholic Church.
“It’s a potent message to the victims: They had better come forward immediately because they might be shut out,” she said. “So, they come forward whether they’re ready or not.”
Legal battles over the coalition were just the latest in a string of skirmishes that have broken out over the past months.
The coalition faced opposition from an unlikely combination of the Boy Scouts’ insurers and the Torts Claimant Committee, a group of nine survivors of child sexual abuse within Boy Scouts appointed in March to represent the interests of claimants.
Insurers and lawyers for the committee argued the coalition didn’t meet financial disclosure requirements and used that rule to question the makeup and structure of the coalition and whom it represents. In hearings in September and October, both groups argued against including the coalition in mediation, saying the interests of survivors already are represented by the Torts Claimant Committee.
“What the insurance companies and the TCC are responding to is the number of victims here,” Sunni Beville of Brown Rudnick, the firm representing the coalition, argued last week.
In allowing the coalition to join the case, Silverstein noted that she could think of many reasons for the increase in claims against Boy Scouts, including the approaching deadline, a national advertising blitz by attorneys and a less stigmatizing environment for victims to come forward in recent years.
“Here the purported concern expressed by insurers … is the explosion of claims … and the concern that claims filed may not be valid,” she said.
The ruling comes after months of disagreement between parties representing former Scouts who say they were abused while in the organization and who may be entitled to compensation.
This summer, some of the state court counsels who formed the coalition began to clash with the Torts Claimant Committee and its representative, James Stang, whose previous abuse cases include the Catholic Church and USA Gymnastics.
The two camps disagreed on the role of Boy Scouts’ local councils in the bankruptcy, and whether accusers from states that have done away with statutes of limitations or created “look back” windows should be given preference.
The committee objected to the coalition’s motion to enter the case, saying the coalition “is nothing more than a marketing term that was concocted” by law firms “who were unhappy they could not control the Tort Claimants’ Committee to implement their agenda in the case.”
In September, insurers sought to depose Tim Kosnoff and Andrew Van Arsdale, attorneys with Abused in Scouting who say they represent thousands of survivors. Kosnoff and Van Arsdale created the coalition, and their involvement spawned further dispute after the U.S. Trustee in the case turned over an email from Kosnoff.
In an objection to the coalition’s inclusion, Century Indemnity Company, one of Boy Scouts’ insurers, argued the contents of the email explained why the coalition didn’t make required disclosures: because it made it clear that the group intended to “exert total control” over the case, which, Century argued, could undermine “the integrity of the bankruptcy process.”
Century cited Kosnoff’s June email, in which he wrote, “[h]ere is the message: We control 80% of the claims i.e. our coalition controls the case. … Nothing happens until AIS says so. We smile, nod our heads and do nothing, nothing at all.”
In a hearing last week, David Wilks, who represents Kosnoff and Van Arsdale, called the email a distraction put forward by Boy Scouts’ insurers.
“The insurers have seized upon a confidential email that never should have been made public, which expressed an attorney’s views on how to best advance his client’s interest,” he said.
In her ruling, Silverstein said it was “more than unfortunate” but not enough to compel Kosnoff’s deposition to Boy Scouts’ insurers.
In August, Boy Scouts sought to curb advertising by law firms directed at potential survivors of child sexual abuse within Scouts, arguing the advertising contained “false and misleading statements.”
Silverstein ruled that law firm advertising should remove false and misleading claims: that survivors can remain anonymous; that they wouldn’t have to be deposed or appear in court; and that the proposed trust has a budgeted amount, pegged at $1.5 billion in some ads.
A point of contention brewing during the first eight months of the case has been how much the 260-plus local councils would contribute to the trust. Boy Scouts of America has insisted that the local councils are distinct and financially independent from the national organization and have argued they should be “protected parties” in the bankruptcy case.
An attorney representing hundreds of men molested by scoutmasters or other leaders decades ago said on Tuesday that victims will be ‘deprived’ of justice with the bankruptcy filing by the Boy Scouts of America. (Feb. 18)
Local councils have been granted an injunction halting all civil cases against them as the bankruptcy case proceeds. Still, several attorneys for accusers have continued to file lawsuits against them in states where look-back windows are closing.
The national scouting organization has been mired in civil litigation since a landmark case in 2010 that resulted in $19.9 million in damages, the largest ever for a single individual against the Boy Scouts of America. That case triggered the release of more than 20,000 confidential documents, which became known as the “perversion files.”
Those records named more than 1,000 banned volunteers, revealing that the 100-year-old organization had kept track of suspected and known abusers and failed to consistently report them to police or fully inform parents or the public of the scope of the problem.
Rachel Axon is a reporter on the USA TODAY investigations team, focusing primarily on sports and gender issues. Contact her at [email protected] or @rachelaxon, or on Signal at (352)234-3303.
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