The Boy Scouts of America’s bankruptcy plan for resolving 82,200 claims of childhood sexual abuse hinges on promises of legal immunity for the youth group’s partners, affiliates and insurers, similar to the liability releases that have upended the planned reorganization of opioid manufacturer Purdue Pharma LP, WSJ Pro Bankruptcy reported. In a surprise ruling last week, a New York federal judge overturned a $4.5 billion settlement between bankrupt Purdue and its owners, members of the Sackler family. Purdue’s bankruptcy plan included legal releases shielding the Sacklers, who aren’t in bankruptcy, from pending and future lawsuits over opioid addiction, despite objections from a handful of state attorneys general. The ruling, which will be appealed, said that bankruptcy courts have no authority to sign away creditors’ claims against third parties to a chapter 11 case, like the Sacklers. That has implications for the Boy Scouts, a group that is similarly depending on releases for entities that aren’t themselves in bankruptcy to encourage contributions to a settlement fund. The Boy Scouts entered chapter 11 protection last year in the largest-ever bankruptcy filed over childhood sexual abuse. The group has come up with a settlement plan, now nearing $3 billion, that it hopes will allow it to leave bankruptcy, although lawyers on different sides of the issue have given conflicting information on what abuse victims can expect to receive. Abuse survivors have until Dec. 28 to vote on the Boy Scouts’ settlement offer, which if approved in bankruptcy court would resolve all abuse claims, even those from people who voted no on the plan.
