The Boy Scouts of America, once the quintessential organization of youth cultural development, filed for bankruptcy in Delaware shortly after midnight Tuesday, vowing to use its existing resources to compensate the growing list of former youth participants who claimed to have been sexually abused by Boy Scout leaders and volunteers.
In a news release following the filing Roger Mosby, BSA president and CEO, said the organization will be setting up a trust to administer compensation and treatment for victims who could number in the thousands.
“While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process — with the proposed trust structure — will provide equitable compensation to all victims while maintaining the BSA’s important mission,” Mosby said.
In the filing BSA general counsel Steven McGowan, a former complex litigation attorney at Steptoe & Johnson, reached out to Sidley Austin as general bankruptcy counsel, including lawyers from its Chicago and New York offices. Morris, Nichols, Arsht & Tunnell is advising as Delaware bankruptcy counsel. BSA’s financial advisor is listed as New York-based Alvarez & Marshal and Omni Agent Solutions, headquartered in California, will be the organization’s noticing and claims agent.
The possibility of bankruptcy had been looming over the Irving-based organization for nearly a decade when the extent of the abuse claims began to emerge. As evidence, BSA listed 25 law firms that are representing the largest numbers of abuse claims.
The organization, which claims 2.2 million participants, listed the potential number of creditors as 1,000 to 5,000. Without claiming any specific holdings, BSA estimates its assets at somewhere between $1 billion and $10 billion.