The Boy Scouts of America fell short of winning the level of support it sought from sex-abuse victims for the nearly $2.7 billion settlement plan that would lift the organization out of bankruptcy, according to a preliminary vote count released Tuesday, WSJ Pro Bankrptcy reported. The proposed settlement of 82,200 claims of childhood sexual abuse earned the support of just over 73% of those who cast votes, falling just shy of the 75% support the Boy Scouts were targeting. The youth group has said it believes that level of acceptance would ease court approval of its chapter 11 plan, while anything less makes it more vulnerable to challenges from the minority of abuse victims who reject it. Nearly 54,000 survivors cast ballots, according to the Tuesday court filing. “Today, the Boy Scouts of America (BSA) announced the plan of reorganization that it has been pursuing failed to garner the required votes to proceed to a confirmation hearing in February,” Pfau Cochran Vertetis Amala PLLC, one of the law firms opposing the settlement said Tuesday. The bankruptcy plan includes compensation from the Boy Scouts, hundreds of affiliated local councils, its biggest insurers and some troop-sponsoring churches, which struck deals with the law firms representing the bulk of the abuse claimants. The current tally isn’t final, and marks the first of several steps along a possible path out of bankruptcy for the Boy Scouts, which has been dogged for years by allegations of widespread childhood abuse. The youth group has apologized for past failures to protect children and said bankruptcy is the fairest way to resolve its liabilities and compensate survivors. While bankruptcy law generally requires two-thirds approval from creditors for a proposed deal, chapter 11 cases involving mass injury and tort liabilities typically have to garner greater support. The youth group is under intense financial pressure to resolve the bankruptcy case and leave chapter 11. But there is still time for the Boy Scouts to try to flip votes to yes from no and potentially clear the 75% threshold ahead of a trial on the settlement plan scheduled for next month. The judge presiding over the chapter 11 case in the U.S. Bankruptcy Court in Wilmington, Del., is likely to view the settlement plan more favorably the more support it garners.
