$800M From Boy Scouts Insurer Boosts Fund for Sex Abuse Victims to Largest in U.S. History

One of the largest insurers of the Boy Scouts of America (BSA) has tentatively agreed to contribute $800 million to the fund of victims of sex abuse when they were Boy Scouts as part of the BSA's bankruptcy case, bringing the total settlement fund to over $2.6 billion.

Attorneys announced Monday the agreement would call for Century Indemnity Co. and its affiliates to pay $800 million in exchange for facing no further liability for the thousands of abuse claims the BSA is currently reckoning with.

A total of $2.6 billion would be the largest sexual abuse settlement in the history of the United States. The over 82,000 claimants have a deadline of Dec. 28 to vote on a reorganization plan for the BSA that would finalize the settlement fund, which currently equals about $31,600 per victim.

The plan that will be voted on says the Boy Scouts and its roughly 250 local councils must provide as much as $820 million to the fund through cash and property.

The Boy Scouts filed for bankruptcy in Feb. 2020, to be protected from some 275 lawsuits at the time and create a fund to settle them. Now, over 82,000 claims have come in from men who say they were sexually abused as children.

The official abuse claimants committee, which was appointed by the U.S. bankruptcy trustee, is charged with representing the best interests of all 82,000 claimants, saying it represents a fraction of the potential liabilities that could be paid by the insurance companies and the BSA.

A separate group, the Coalition of Abused Scouts for Justice, a conglomerate of several law firms that represent about 18,000 claimants, said the new settlement is a reason for victims to vote for the proposed reorganization plan, so the fund can be distributed to the claimants.

Boy Scouts, Sexual Abuse Claims Settlement
Boy Scouts of America uniforms are displayed in a retail store at the headquarters for the French Creek Council of the Boy Scouts of America in Summit Township, Penn., on Feb. 18, 2020. In an agreement announced Monday, attorneys in the Boy Scouts of America bankruptcy 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. Christopher Millette/Erie Times-News via AP File

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 victims' fund, 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 of up to $100 million from the BSA and local councils attributable to growth in 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."

"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."

The coalition, which is affiliated with more than two dozen law firms, has played a dominant role in the bankruptcy despite the existence of an official committee charged with representing the best interests of all abuse claimants. It also has been at the center of various disputes over information sharing and how the BSA's reorganization plan and trust distribution procedures were crafted.

The committee, for example, has said the settlements with local Boy Scout councils would leave them with more than $1 billion in cash and property above what they need to fulfill the scouting mission. The committee has also noted that sponsoring organizations such as churches and civic groups can avoid liability for abuse claims dating to 1976 simply by transferring their interests in insurance policies purchased by the BSA and local councils to the victims fund, without contributing any cash or property.

News of the Century settlement came the same day that a bankruptcy judge in Indiana approved a $380 million settlement involving USA Gymnastics and more than 500 victims of sexual abuse by former national team doctor Larry Nassar. The agreement, which also involves the U.S. Olympic and Paralympic Committee, is in addition to the $500 million that the University of Michigan agreed to pay in 2018 to settle lawsuits brought by more than 300 victims of Nassar, a former associate professor and sports doctor at the school.

The $880 million in the combined Nassar settlements represents an average of more than $1 million per victim, while the proposed $2.6 billion settlement in the Boy Scouts bankruptcy averages about $31,600 per victim.

The Associated Press contributed to this report.

Boy Scouts, Sexual Abuse Claims Settlement
A statue stands outside the Boy Scouts of America headquarters in Irving, Texas Feb. 12, 2020. In an agreement announced Monday, attorneys in the Boy Scouts of America bankruptcy 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. LM Otero/Associated Press File