On July 29, United States Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, rejected the $250 million settlement and other minor aspects of the Boy Scouts' broader restructuring proposal, preventing the nonprofit organization from exiting bankruptcy.
Silverstein rejected the settlement with the Mormon church because it went too far in attempting to protect the church from abuse claims that were only loosely related to scouting activities. According to the judge, the previous settlement would have covered abuse committed by a priest who was also a scout leader, even if the abuse did not occur at a scouting event.
The Boy Scouts of America said late Friday that the court should quickly approve its revised bankruptcy plan, which will provide at least $2.3 billion in compensation to more than 80,000 men who claim troop leaders sexually abused them as children.
A request for comment from the Church of Jesus Christ of Latter-day Saints was not immediately returned Monday.
Without a separate settlement agreement, the Mormon Church will be less fully protected from sexual abuse claims arising from its Scouting activities.
According to Jason Amala of Pfau Cochran Vertetis Amala, who represents over 1,125 abuse victims in the Boy Scouts bankruptcy, claimants would be better off without the $250 million from the Mormon settlement. According to Amala, the Church will now be forced "back to the negotiating table" to make a more equitable offer to settle abuse claims.
The Boy Scouts said its revised plan could be approved quickly at a court hearing on Aug. 24, but a group of insurers, including Chubb Ltd and Liberty Mutual Group, objected to that request on Monday. The insurers claimed that the BSA had not addressed all of the flaws identified in Silverstein's July 29 opinion, and they requested more time to review the changes.
After being hit by a flood of sexual abuse lawsuits after several U.S. states passed laws allowing accusers to sue over allegations dating back decades, the Boy Scouts declared bankruptcy in February 2020.
Individual abuse survivors can expect to receive anywhere from $3,500 to $2.7 million from the bankruptcy plan.