Insurer agrees to $800M settlement in Boy Scouts bankruptcy

Attorneys in the Boy Scouts of America bankruptcy case have reached a tentative settlement under which one of the organization’s largest insurers would contribute $800 million into a fund for victims of child sexual abuse.

The agreement announced Monday calls for Century Indemnity Co. and affiliated companies to contribute $800 million into the fund in return for being released from further liability for abuse claims. The payment would bring the amount of money in the proposed trust to more than $2.6 billion, which would be the largest sexual abuse settlement in U.S. history.

The settlement comes as more than 82,000 sexual abuse claimants face a Dec. 28 deadline to vote on a previously announced Boy Scouts reorganization plan.

That plan called for the Boys Scouts and its roughly 250 local councils to contribute up to $820 million in cash and property into a fund for victims. They also would assign certain insurance rights to the fund. In return, the local councils and national organization would be released from further liability for sexual abuse claims.

The plan also includes settlement agreements involving another one of the Boy Scouts’ major insurers, The Hartford, and the BSA’s former largest troop sponsor, the Church of Jesus Christ of Latter-day Saints, commonly known as the Mormon church. The Hartford has agreed to pay $787 million into the fund for abuse claimants, and the Mormons have agreed to contribute $250 million. In exchange, both entities would be released from any further liability involving child sex abuse claims.

The Century settlement, which is subject to court approval, provides for additional contributions from the BSA and its local councils on behalf of chartered sponsoring organizations. They include a $40 million commitment from the local councils and additional potential payments attributable to growth in BSA membership because of chartered organizations’ continued sponsorship of Scouting units.

“This is an extremely important step forward in the BSA’s efforts to equitably compensate survivors, and our hope is that this will lead to further settlement agreements from other parties,” the Boy Scouts said in a prepared statement. “In addition to our continued negotiations with other insurers, the BSA has worked diligently to create a structure that will allow the Roman Catholic-affiliated churches and United Methodist-affiliated churches who sponsored Scouting units to contribute to the proposed settlement trust to compensate survivors.”

Attorneys with an ad hoc group called the Coalition of Abused Scouts for Justice, which represents about 18,000 abuse claimants, said in a news release that the Century settlement is another reason for claimants to vote for the BSA’s reorganization plan.

“Not only is the coalition creating the biggest possible compensation fund for survivors — it’s the only fund on the table, and it vanishes with a ‘no’ vote,” said attorney and coalition co-founder Anne Andrews. “The coalition also continues to work with the Boy Scouts of America on accountability and safety measures to ensure that no child will have to endure the horrific harm and abuse our clients have suffered.”

Opponents of the plan include several other law firms, as well as the official committee appointed by the U.S. bankruptcy trustee to represent the best interests of all sexual abuse claimants.

The committee has said the plan is “grossly unfair” and represents only a fraction of the settling parties’ potential liabilities and what they should and can pay.