Updated Feb 18, 2020 - Economy

Boy Scouts of America files for bankruptcy

Scout badges

Photo: Al Schaben/Los Angeles Times via Getty Images

The Boy Scouts of America filed for bankruptcy protection in Delaware early on Tuesday.

Why it matters: The Chapter 11 filing comes as the 110-year-old youth organization faces mounting legal costs from multiple sexual abuse lawsuits and declining membership.

  • The Boy Scouts said in a statement it made the filing to "equitably compensate victims who were harmed during their time in Scouting and continue carrying out its mission for years to come."

Details: Only the national organization has filed for Chapter 11, the BSA said. Local councils, which are legally separate and financially independent, have not filed for bankruptcy.

  • The Boy Scouts said it intends to use the Chapter 11 process to "create a Victims Compensation Trust that would provide equitable compensation to victims."
"While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process — with the proposed Trust structure — will provide equitable compensation to all victims while maintaining the BSA's important mission."
— BSA president and CEO Roger Mosby statement

What they're saying: Boy Scouts president and CEO Roger Mosby said in an open letter to victims, "[T]here were times when volunteers and employees ignored our procedures or forgave transgressions that are unforgivable. In some cases, this led to tragic acts of abuse. ... I regret that [BSA] measures weren’t always in place or weren’t always enough. The fact is that predators harmed innocent children in Scouting programs, and for this I am deeply sorry."

  • Attorney Jeff Anderson of Jeff Anderson & Associates, who represents hundreds of survivors of sexual abuse in the Boy Scouts across the country, said he believes that the BSA is using the bankruptcy reorganization to keep perpetrator names and documents secret.
  • "I don’t believe that this legal maneuver by the Boy Scouts of America will stop survivors from coming forward and shining a light on the perpetrators and perilous practices hidden by the organization," he said in a statement emailed to Axios.

The big picture: A victims’ rights attorney working with the Scouts group said last year there were files on 7,819 scoutmasters or other volunteers accused of sexually abusing 12,254 children over several years across the U.S.

  • Laws passed in states including New York and California last year created a temporary window for cases previously barred by the statute of limitations, "exposing the Boys Scouts to an unprecedented level of potential liability," notes the Wall Street Journal, which first reported the bankruptcy filing.
  • The victims' rights group Abused in Scouting said thousands of claims had been filed against the BSA.

Background: The Boy Scouts said in 2018 it was considering filing for bankruptcy protection following the first wave of lawsuits.

  • "Filing for Chapter 11 bankruptcy would allow Boy Scouts to review and reorganize the organization to address claims," Abused in Scouting said last month as anticipation of the action mounted. "However, it would also drastically shorten the time abuse victims have to file claims against the BSA."

By the numbers: The BSA has more than 1.26 million Cub Scouts and over 820,000 Boy Scouts, according to its 2016 report.

Go deeper: Allegations emerge that over 12,000 Boy Scouts were sexually abused

Editor's note: This article has been updated with new details throughout.

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