A bankruptcy court is expected to approve the Boy Scouts of America’s sex-abuse settlement plan, advancing the use of chapter 11 to resolve mass torts in an evolving area of the law, WSJ Pro Bankruptcy reported. Large companies and nonprofits have drawn controversy for invoking bankruptcy as a litigation management tactic and using the tools of chapter 11 to forge settlements outside the civil jury system. The Boy Scouts faced protests from insurance companies, abuse victims and others involved in its strategy for settling 82,200 claims of childhood sexual abuse. Ultimately, 86% of the survivors who cast ballots on the plan voted yes. In July, Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., largely overruled those objections and indicated she would approve the chapter 11 plan once it was revised to reflect her views. Her ruling is likely to be appealed. The Boy Scouts are expected today to propose a revised plan for the judge’s confirmation.
