The Boy Scouts of America (BSA) filed for Chapter 11 bankruptcy on February 18, 2020.
Chapter 11 bankruptcy is also referred to as reorganization. It allows businesses time to restructure or reorganize their debts, while the business continues to operate.
The Boy Scouts of America case was filed in the U.S. Bankruptcy Court for the District of Delaware. The bankruptcy is largely in response to the large number of sexual abuse claims made against the organization.
PCUSA General Counsel Mike Kirk has provided this Q&A for congregations that have been involved with the Boy Scouts, in relation to their bankruptcy and allegations of sexual abuse. Mike notes:
The information should be helpful to any congregation that has/had a Boy Scout troop or had a troop and a charter from the Boy Scouts of America.
However, congregations need to know that:
1. the national offices cannot take action on behalf of the member churches since they are, according to the Book of Order, to form separate corporations for purposes such as owning property, employing staff, and purchasing insurance (G-4.0101). Therefore, attorneys hired by congregations will likely advise congregations who believe they should file with the bankruptcy court to do it on behalf of their church corporation; and
2. churches would be wise to contact their local attorney to discuss the information in the Q&A. If the information leads them to believe they may need to file something in the bankruptcy action they should seriously consider hiring local counsel to help them with that process.
The bankruptcy action was filed by the BSA. We expect that some sort of fund will be set up by the bankruptcy court for survivors, against which they can make claims, and for parties (ex. congregations) who may be sued by survivors who might have a claim against the BSA and that party because a BSA leader engaged in abuse while the trooped was “hosted” by the congregation.
It is important to note that the deadline to take action/file in the BSA bankruptcy action is Monday, November 16, 2020.
United Church Services (Insurance Provider): The linked information sheet details the following information and questions for your consideration:
- What claims are subject to this notice
- Should your ministry file a claim
- Deadline to file a claim
- How to file a sexual abuse survivor proof of claim
- How to file a general proof of claim
United Methodist News: Churches urged to file legal document in Boy Scouts lawsuit