The Hartford to Pay $650 Million to Settle Boy Scout Sexual Abuse Claims
The Hartford Financial Services Group announced Friday it would pay $650 million to settle sexual abuse claims against the Boy Scouts of America.
If it is approved by a Delaware bankruptcy judge, the payment to the Boy Scouts and its 272 local councils would release the insurance company from further insurance obligations but would not relieve the Scouts of all liabilities from the decades-long sex scandal.
More than 95,000 abuse claims have been filed with liability estimates ranging as high as $1 billion.
The Boy Scouts of America filed for Chapter 11 bankruptcy protection in February 2020 as the number of liability claims grew. The organization is trying to set up a “mass tort” compensation fund to resolve all the claims.
The Boy Scouts’ bankruptcy filings show it has liabilities estimated at $500 million to $1 billion, largely because of the lawsuits. It also has $61.5 million in secured debt, $50 million in trade and unsecured debt and $183 million in unfunded pension obligations.
Mediation for a global settlement failed to reach agreement. Now the Boy Scouts seek a court ruling that would either require payments from a single fund or require that only the debtor could be sued.
Lawsuits against the debtor, referring to the national organization, would relieve local councils and Scout leaders of legal liabilities.
The number of defendants became an important issue when attorneys for the abuse victims said they would sue campgrounds and other properties owned by the local councils to fully compensate their clients.
The local councils are not debtors named in the bankruptcy proceedings.
The Boy Scouts considers local councils separate entities, despite the fact they share insurance policies and are named as “related parties” in the bankruptcy case.
The Boys Scout said in a statement that the organization was “pleased” with the progress toward settlement indicated by The Hartford agreement.
“We are committed to continuing our mediation efforts with all parties and look forward to sharing additional updates as these discussions progress,” the statement said.
The Hartford said in a statement it sympathized with the victims of sexual abuse.
“Our agreement with BSA is an encouraging step towards a global resolution that will promote the BSA’s efforts to equitably compensate survivors,” the statement said.
Before the sex abuse claims erupted into legal claims, the Boy Scouts was a mainstay of American youth during its 110-year history. It peaked at more than four million members in the 1970s but has now dropped below two million.
Many of the claims come from now middle-aged or elderly men who were Scouts in the 1960s, ‘70s and ‘80s.
Amid earlier complaints, the Boy Scouts developed a prevention program that included criminal background checks for all adult leaders. Staff members and volunteers were required to participate in sex abuse prevention training. At least two adult leaders needed to be present during all activities with children.
Scouting starts with Cub Scouts at five years old to 11 years old and ranges through Venturing at 14 years old through 21 years old. The traditional Scouts BSA are 10 years old through 18 years old.
In recent years, lawsuits and declining membership have eroded the Irving, Texas-based organization’s finances. The Boy Scouts have paid nearly $12 million to the law firm of Ogletree Deakins since 2015 for legal representation.
In October 2019, the Boy Scouts announced a substantial membership increase to cover its additional insurance and operational costs.
The case is In re: Boy Scouts of America and Delaware BSA LLC, case number 1:20-bk-10343, in the U.S. Bankruptcy Court for the District of Delaware.
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