Boy Scout insurers get more time to oppose settlement
- Law firms
- Related documents
- Preliminary hearing set for July 29
- Insurers say they have been excluded from settlement talks
- Judge applauds protections for children
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(Reuters) – Boy Scouts of America insurers will have more time to oppose the youth organization’s proposal regulation with tens of thousands of men who say they were sexually abused as children by group leaders.
U.S. bankruptcy judge Laurie Selber Silverstein in Wilmington, Delaware, said in a virtual hearing Wednesday that she would postpone a July 20 preliminary hearing on the deal to July 29, giving insurers who may be forced to cover the claimants more time to prepare their case against the agreement. The delay, although just over a week, could cause the Boy Scouts to delay their eventual exit from bankruptcy, which the organization had previously hoped to do by the end of the summer.
The organization, represented by White & Case, filed for Chapter 11 protection in February 2020 in a bid to resolve nearly 300 sexual abuse lawsuits. Last week, the Boy Scouts struck a deal with representatives of around 60,000 sexual abuse claimants.
The insurers, represented by attorneys at O’Melveny & Myers, Wilmer Cutler Pickering Hale & Dorr and Gibson Dunn, say the settlement is valid and requires insurance coverage for tens of thousands of claims without proper verification. They have repeatedly accused Boy Scout lawyers of excluding them from critical mediation sessions that led to the deal with survivor groups. Lawyers for the Boy Scouts have denied this allegation.
Under the deal, the national organization and more than 250 local councils will contribute $ 850 million to a settlement trust that will distribute compensation to abuse claimants. Applicants will also be entitled to Boy Scout rights to insurance policies. About 82,000 sexual abuse complaints have been filed against the Boy Scouts through the bankruptcy.
At Wednesday’s hearing, Tancred Schiavoni of O’Melveny, representing Century Indemnity Company, reiterated his previous concern that allegations of sexual abuse are not being properly assessed. Claimants who don’t have legitimate claims, he said, could still collect $ 3,500 each as part of the settlement.
A lawyer for “several thousand” claimants, Irwin Zalkin of the Zalkin law firm, said at the hearing that his clients still have problems with the settlement proposal and have not yet signed it. One of his problems is with future claims, which he says only apply to claimants who are now under the age of 18 or who have recollected memories of abuse, which are not recognized by all states. .
Lawyers for the Boy Scouts and survivor groups who signed the deal told the judge that a quick exit from bankruptcy is crucial as the organization’s funds continue to shrink. The Boy Scouts expect to spend up to $ 150 million on legal fees during the Chapter 11 case, according to court documents.
Some chartered organizations, including churches, which run local scout units also challenged the settlement. The agreement subordinates their indirect abuse claims, which typically seek compensation for liabilities arising from direct claims that would otherwise have been filed against the national organization, below those of direct sexual abuse claims.
Mediation with insurers and other opponents of the deal is ongoing, according to Boy Scouts lawyer Matt Linder of White & Case.
Although Silverstein did not say whether she would ultimately approve the settlement, she indicated that she was happy with the non-monetary arrangements, including the creation of a “child protection committee”, designed to ensure safety. scouts in the future.
“I find it very appropriate,” she said.
The case is In re Boy Scouts of America, United States Bankruptcy Court, District of Delaware, No. 20-10343.
For the Boy Scouts: Jessica Lauria, Michael Andolina, Matthew Linder and Laura Baccash of White & Case; and Derek Abbott and Andrew Remming of Morris, Nichols, Arsht & Tunnell
For Hartford: James Ruggeri, Joshua Weinberg and Michele Backus Konigsberg of Shipman & Goodwin; Philip Anker, Danielle Spinelli and Joel Millar of Wilmer Cutler Pickering Hale and Dorr; and Erin Fay and Gregory Flasser from Bayard
For Century: Tancred Schiavoni and Gary Svirsky from O’Melveny & Myers and Stamatios Stamoulis from Stamoulis & Weinblatt
For the official Complainants Committee: James Stang, Iain Nasatir, John Morris, James O’Neill and John Lucas of Pachulski Stang Ziehl & Jones
For the Abused Scouts for Justice Coalition: David Molton, Sunni Beville and Eric Goodman of Brown Rudnick; Lawrence Robbins, Ariel Lavinbuk, William Trunk and Joshua Bolian of Robbins Russell Englert Orseck Untereiner & Sauber; and Rachel Mersky from Monzack Mersky Browder and Hochman
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