The Boy Scouts of America (BSA) reached an agreement with groups of victims of sexual abuse in the wake of the youth organization’s bankruptcy – but the new deal noticeably omits any mention of the group’s insurers.
According to an agreement recently filed with the bankruptcy court, BSA is offering survivors up to $ 850 million in cash and other assets and will transfer insurance rights to a trust. The trust manages claims and distributes payments.
“After months of intensive negotiations, the debtors in these Chapter 11 cases have reached an agreement with every single official and main group of creditors,” said BSA lawyers in the file.
In particular, the proposed deal makes no mention of insurance carriers that may be required to compensate victim claims under the policies they sold to the BSA decades ago when most of the alleged abuse cases were taking place.
In a previous court case, lawyers for several insurance companies had accused the BSA of allowing lawyers for victims of abuse to rewrite the youth group’s restructuring plan to include terms favorable to their clients. Insurance representatives are concerned that the BSA’s liability for abuse claims will be resolved under the proposed trust distribution process to determine coverage issues, The Associated Press said.
The Wall Street Journal reported that the new settlement agreement must first be subject to creditors’ voting and approval from the US bankruptcy court in Wilmington, DE.
Continue reading: Boy Scouts could drop a $ 650 million deal with The Hartford
News of BSA’s new settlement with the victims comes after the group abandoned its previously agreed settlement with insurer Hartford Financial Services Group for $ 650 million. That deal was abandoned after victim groups stated that they would oppose any compensation plan that included the BSA’s settlement with The Hartford, which they believed was inadequate.