Boy Scouts have more time to respond to legal action over assets
The official committee representing child sexually abused in the Boy Scouts of America bankruptcy has agreed to give the BSA more time to respond to a lawsuit over assets that the Boy Scouts say are unavailable for creditors.
DOVER, Del. – The official committee representing child sexually abused in the Boy Scouts of America bankruptcy has agreed to give the BSA more time to respond to a lawsuit challenging the BSA’s claims that several hundred million dollars of its assets are not available to creditors.
The tort plaintiff committee filed a complaint in January challenging BSA’s claim that two-thirds of its $ 1 billion listed assets, or more than $ 667 million, are “restricted assets” that are not. not available to compensate victims of abuse or other creditors.
Lawyers on Wednesday submitted a case to the court, the deadline for BSA to respond to the complaint, indicating that the committee has agreed to extend the response time until April 2. The judge signed the order the same day.
Most of the BSA’s allegedly restricted assets consist of a note receivable from Arrow WV, a non-profit entity formed by the BSA in 2009 that owns the Summit Bechtel Reserve in West Virginia, home to the National Scout Jamboree. The BSA leases the Summit to Arrow WV for a nominal fee and provides the services necessary for its operation. The Summit was built with bonds held by JPMorgan, the primary secured lender of BSA. The tort committee maintains that there are no restrictions that could be applied to Arrow WV’s rating.
BSA’s allegedly restricted assets also include three “high adventure facilities” valued at over $ 63 million. These are the Philmont Scout Ranch in New Mexico, the Northern Tier in Minnesota and the Florida Sea Base. The committee says there are no specific deed or donor restrictions that prevent the sale of these facilities and the use of the proceeds to pay creditors.
Meanwhile, lawyers for insurance companies facing significant exposure for child sexual abuse claims filed a court case on Thursday lambasting the reorganization plan the BSA filed earlier this week. They said the plan “did not garner support from any major constituency in this case.”
The plan has been heavily criticized by lawyers representing sexual abuse claimants, as well as by the official committee appointed to represent abuse survivors.
Lawyers for the insurers argue that vehement opposition from lawyers for the plaintiffs to the plan strengthens the insurance companies’ argument that they should be allowed to serve requests for documents on 1,400 people who have filed sexual abuse complaints. They also argued that they should be able to interview dozens of them under oath, with the goal of determining whether there was widespread fraud in the claims process. The judge has yet to rule on their request.
“The violent reaction of the plaintiffs ‘lawyers to the newly filed plan shows that progress cannot occur without an investigation of the claims filed in this case,” the insurers’ lawyers wrote. Without such an investigation, they said, either the plaintiffs’ attorneys will “spend little time” on the BSA, which will result in a proposed plan that would allow tens of thousands of invalid claims, or the case will head to the end. liquidation.
The plan filed by BSA lawyers on Monday contemplates the continued operations of its local troops and national adventure camps, but leaves many unanswered questions about how it will resolve tens of thousands of sexual abuse complaints by former scouts.
A hearing on the adequacy of the BSA’s disclosure statement, which outlines and explains the reorganization plan, and which must be approved by the judge before the BSA can solicit the creditors vote, is set for April 15.