Opponents of the Boy Scouts of America’s plan for a $2.4 billion sex-abuse settlement recently found fresh legal ammunition when the Supreme Court agreed to examine a similar plan drawn up by Purdue Pharma, WSJ Pro Bankruptcy reported. Some of the Boy Scouts’ insurers and a small group of sex-abuse victims have renewed calls in federal court to temporarily block the youth group’s chapter 11 plan, saying it shouldn’t advance any further until the Supreme Court weighs in on Purdue’s plan for mass opioid liabilities. Their attempt is the latest example of how the Supreme Court’s decision to hear a challenge to Purdue’s chapter 11 plan is rippling through the bankruptcy system. The Supreme Court last month said it would examine whether bankruptcy law can be used to resolve creditors claims’ against third parties that aren’t in chapter 11 without the consent of all claimants. Such releases are central to the bankruptcy plans crafted by both the Boy Scouts and Purdue. Purdue’s plan would release its Sackler family owners from opioid-related liabilities in return for up to $6 billion in settlement payments. In the Boys Scouts’ plan, local councils and partner organizations of the organization would be shielded from the claims of the sex-abuse claimants. In court papers filed Friday, the Boy Scouts argued that, unlike the Purdue case, the youth group’s plan can’t be halted as the wheels are already in motion to collect the settlement funds and distribute them to plaintiffs.
