Boy Scouts of America declares bankruptcy in the wake of sexual abuse scandal
On Tuesday, February 18, 2020, the Boys Scouts of America released a press release stating the organization had filed for Chapter 11 bankruptcy. This follows years of sexual abuse allegations against the organization, which have resulted in numerous financial payouts to victims and their families.
The Boy Scouts of America (BSA) have been around since 1910, but in recent years the future of the organization has been in doubt as investigations have revealed a systemic pattern of covering up abuse allegations.
BSA declares bankruptcy
In their Tuesday press release, the BSA announced they had “filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.” The press release explained this action was being undertaken so that the BSA could continue to operate while paying sexual abuse victims who had successfully sued the organization.
Despite the bankruptcy, the BSA says it will continue to operate and run its programs, which include “unit meetings and activities, council events, other Scouting adventures and countless service projects.”
They also pledge to establish a Victims Compensation Trust to provide financial restitution to children who were abused while involved with the organization.
Sexual assault in the Boy Scouts
While accusations of sexual abuse are not new to the BSA, this last decade has seen those accusations multiply.
In 2012, a lawyer for multiple alleged victims published the name of 1,900 former BSA members, some of whom were scoutmasters, accused of abusing children within the organization.
Those 1,900 people were barred from the BSA.
In June 2019, Time published a wide-ranging investigation of the BSA which found “at least 7,800 suspected assailants sexually abused 12,254 boys in the Boy Scouts” from 1944 to 2016. The organization is alleged to have covered up the abuse while also maintaining a list of the accused men, known as the “Perversion Files” (or “P Files”).
Some victims cited the revelations of systemic sexual abuse within the Catholic Church as the motivation to come forward to speak about their experiences.
In January 2020, eight men filed a lawsuit against the BSA “for negligence, fraud and breach of fiduciary duty” in relation to abuse they experienced as children in the Scouts.
To circumvent the statute of limitation laws that would prevent legal action for sexual abuse, the suit was filed in Washington, DC, where the BSA claims residency.
What is Chapter 11 bankruptcy?
The United States Bankruptcy Code lays out the ways individuals and organizations can declare bankruptcy. Filing bankruptcy is sometimes necessary to do away with debt or to arrange a means for paying off debt. The different types of bankruptcy are called “chapters,” so, for example, an individual with debt can file for either Chapter 7 or Chapter 13 bankruptcy.
Chapter 11, which is what the BSA filed for, pertains to businesses and nonprofit organizations, such as the BSA. It is also known as “reorganization” or financial restructuring.
As stated in the original BSA press release, filing for Chapter 11 in bankruptcy court still allows the organization to remain in operation. However, certain business decisions, including selling assets and expanding business operations, must be approved by the court.
The BSA must propose a restructuring plan for its organization, which the court will oversee to ensure creditors are repaid. In this case, the creditors are the victims of sexual abuse who have won lawsuits against the BSA.
The history of the Boy Scouts
The Boy Scouts of America began in 1910, two years after a British military man named Robert Baden-Powell began publishing a multi-part guide, Scouting for Boys, in England.
The guide focused on outdoorsy skills, such as camping, woodcraft, and boating. However, it also emphasized general values like patriotism, observation, and chivalry.
Baden-Powell was a war hero in his native England and his scouting guides quickly became a sensation. Boy Scout troops soon started appearing across the nation. Within less than a year of publishing the first part of his guide, there were 60,000 Boy Scouts in England.
The Boy Scouts later spread to America after a chance encounter between a scout and a Chicago man, William Boyce, who was visiting London in 1909. After the young scout helped Boyce navigate through the thick city fog, the man tried to tip the boy. However, the boy refused the money on the basis that a Boy Scout could not accept money for doing a good deed.
Impressed, Boyce returned to America and helped bring various regional youth groups under the umbrella of the Boy Scouts of America in 1910. In 1912, the Girl Scouts of America, a separate organization, was formed by Juliette Gordon Low in Savannah, Georgia.