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Boy Scouts says it’s safe, and offers sex abuse victims just 80 days to file claim. Victims balk.

February 20, 2020 ·  By Cara Kelly, Lindsay Schnell, Nathan Bomey USA TODAYfor www.usatoday.com

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Stealthily, in thousands of pages of documents filed in the dark of night, the Boy Scouts of America has planted the first seeds for a bankruptcy that is expected to grow into a dramatic and expansive fight. 

Deep in the paperwork filed early Tuesday in federal court in Delaware is a time bomb: a proposal to give those who say they were sexually abused while Scouts just 80 day window to submit their claims.  

For survivors and their attorneys, who want a public reckoning, that early posturing is ominous. 

“Boy Scouts of America wants to see Boy Scouts of America proceed, if possible, as if this never happened and that the men who were abused as Scouts, their issues just have to be dealt with and let the Boy Scouts proceed,” said Paul Mones who has represented dozens of cases against Boy Scouts.  

Mones said attorneys will be contesting the 80-day deadline as “way too short. People have waited decades to come forward.” 

The country’s largest youth group took pains to present itself as a stand-up citizen in its filing, a guy with Scouts Honor charm who deserves to be trusted. The organization does much for society and has nothing to hide, it argues, and thus should be freed from the weight of 1,700 current and potential lawsuits for child sexual abuse. 

The documents also lay a foundation for why the national organization should be the only entity required to cover the liability that landed the organization in a state of near financial collapse — not the 260-plus local Boy Scout councils.  

A Victims Compensation Trust is proposed, but the not the amount of money that would be set aside for it. Bankruptcy experts expect Boy Scouts to argue that some of its assets will need to be reserved to help Boy Scouts emerge from all of this intact. 

Central to the argument that Scouting should be trusted to continue serving kids is a thick report included in the court filings, commissioned last year by the Scouts. Key among its findings: Scouts’ safety measures are the strongest and most effective of any youth organization. 

For years, victims have sought more than a corporate apology crafted by public relations professionals. Now, they fear the bankruptcy will deprive them of that. 

“They said they believe all victims and they want them to come forward, and then they do this,” said a 51-year-old Riverside, California man who says he was abused between the ages of 11 and 15. “How can you say you want to give people justice when you file for bankruptcy?” 

The survivor — USA TODAY does not identify victims of sexual assault without their consent — said he has mixed feelings about whether Boy Scouts of America should be disbanded, acknowledging that “they probably still do some good.” But if he had a son, he would not allow him to be a scout. 

His lawsuit is now in limbo, along with 274 other suits, thanks to an expected automatic stay placed on civil litigation. That stay would apply to the local councils and all charter entities as well, meaning no one can sue Boy Scouts or any of its entities during or after the bankruptcy proceedings for anything that happened prior to the filing. Instead, all claimants will be funneled into the bankruptcy.  

The process can take months, even years. Boy Scouts and bankruptcy experts say it can ensure equitable treatment for all victims. Advocates say it will result in pennies on the dollar for those who were abused.  

Bankruptcy attorney Douglas C. Bernstein cautions that this is only the start of a series of negotiations that make up a bankruptcy. Tuesday’s filings are essentially the Boy Scouts’ opening arguments.  

“What you see on day one isn’t necessarily what the end result is going to be,” said Bernstein,  a fellow of the American College of Bankruptcy and member of Plunkett Cooney’s Banking, Bankruptcy & Creditors’ Rights Practice Group. 

Bernstein is just as certain that people will walk away unhappy in the end, as is the case with most any bloodbath of a debate. 

“Unless you’re paid 100 cents on the dollar of you claims, you’re never going to be happy,” he said, “and that’s the nature of bankruptcy.”

Who’s liable for abuse? 

In its filing, Boy Scouts broke down its assets in ways most onlookers had never seen. Listed are a little more than $1 billion in assets, including $123 million in cash, $199 million in investments and $63 million in the national properties enjoyed by thousands of scouts. 

That includes the iconic Philmont Scout Ranch, a 140,000-plus-acre park in the New Mexico mountains where an estimated 22,000 scouts backpack every summer.  

Debts also are laid out, so massive debts that Eric Snyder, partner at NYC-based law firm Wilk Auslander and chairman of the firm’s bankruptcy department described them as startling.  

“That they have $328 million in debt for a nonprofit; I was like, ‘Wow,’ ” Snyder said. “That’s going to complicate how distributions are made.”  

Last year, Boy Scouts confirmed it had used Philmont Scout Ranch, a New Mexico property that the organization values at more than $40 million, as collateral for an existing line of credit for insurance. 

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