The U.S. Department of Justice's bankruptcy watchdog objected on Monday to the Boy Scouts of America's proposed reorganization plan and underlying $2.7 billion sex-abuse settlement, saying it provides impermissible legal protections to insurers and the bankrupt youth organization's local councils, among others, Reuters reported. The U.S. Trustee said in a court filing that the nondebtor releases provided to insurers and others, which have not filed for chapter 11, in exchange for contributions to the settlement are not authorized by bankruptcy law. "The plan lacks even a cursory discussion of why the non-debtor releases are necessary," the U.S. Trustee said yesterday's filing, while also noting the releases were so broadly written it was not clear who was covered by them. BSA filed for bankruptcy in February 2020 to resolve allegations by former Scouts spanning decades that they were abused by troop leaders as children. Since then, more than 82,000 abuse claims have been filed in the bankruptcy. The plan aims to resolve all of those claims through the $2.7 billion settlement, which will be funded by insurers, local councils (which are independent legal entities), and BSA itself, among others. Insurers, local councils, committees that represent abuse survivors, current and former BSA officers and employees, and organizations that chartered Scouting units and activities will be among those covered by the nondebtor releases. Anyone who personally committed or was alleged to have committed abuse is not protected.
