Hartford agrees to pay $ 650 million in Boy Scouts bankruptcy


DOVER, Del. – Insurance company The Hartford has agreed to put $ 650 million into a child sex abuse victim trust fund project as part of the Boy Scouts of America bankruptcy case.

In return for payment, the Boy Scouts and his local councils would release The Hartford from any obligations under the policies it had issued to the BSA and the councils dating back to 1971.

The settlement agreement and release were submitted to court on Friday by a panel of mediators who are working with BSA, victims of abuse and other bankrupt parties to try to shape a global resolution of more than 80,000 complaints of sexual abuse.

“Our agreement with The Hartford is an encouraging step towards achieving a global resolution that will advance BSA’s efforts to fairly compensate survivors and continue Scouting’s mission,” the organization said in a statement. “… We are committed to continuing our mediation efforts with all parties and look forward to sharing additional updates as these discussions progress.” “

According to the court record, The Hartford’s payment will be reduced if, after signing the agreement, the BSA or settlement trust enters into an agreement with another insurer, Century Indemnity Company, and Century’s settlement amount is less than twice The Hartford’s settlement amount.

Even without The Hartford’s possible payment reduction, lawyers representing victims of abuse in the bankruptcy were appalled by the settlement.

” It’s scandalous. … Their real liability runs into billions of dollars, ”said Paul Mones, who represents hundreds of victims of abuse, including members of the official Civil Liability Plaintiff Committee which is charged with acting as a trustee for victims of abuse in bankruptcy.

“It’s just business as usual for the Boy Scouts – honoring their supposed understanding and concern for their horrific legacy of sexual abuse… but doing nothing of substance,” Mones added.

Jim Stang, an attorney for the tort claimants committee, or TCC, said there were at least 24,000 sexual abuse complaints subject to The Hartford’s policies. The actual number is likely much higher, given that many victims did not include the dates they were abused on their claim forms, he noted.

“We believe their exposure is $ 8 billion for the 24,000 claims,” Stang said, adding that the committee would oppose the settlement. “They don’t even pay 10% of what we think they are required to pay for. “

The deal with The Hartford was announced after the Boy Scouts tabled a revised reorganization plan earlier this week after receiving little backing for a previous proposal.

The previous plan called for a contribution of $ 300 million from the local boards to the settlement trust, approximately $ 115 million in cash and non-insurance assets of the BSA, and the assignment of the BSA insurance policies and local boards. . In return, the BSA, its 253 local councils and hundreds of sponsoring organizations such as churches and civic groups would be released from all responsibility. Any insurance companies that agree to pay specific settlement amounts to the trust would also be immune from any further liability.

The new plan increases the contribution of local councils to $ 425 million, but keeps the national organization’s contribution at $ 115 million. More than half of this amount is the estimated value of the BSA art collection, including several paintings by Norman Rockwell.

If abuse victims did not approve of the new plan, the BSA – which says it must come out of bankruptcy by the end of the summer – would turn to another BSA-only plan. Under this plan, the settlement trust would be funded only by the BSA and only for claims against the national organization, not against local councils. Local boards and sponsoring organizations such as churches and civic groups would not make any contribution to the Settlement Trust and would have no protection against liability for abuse claims.

Depending on the plan used, the BSA estimates the amount of money available for victims of abuse to be between $ 2.4 billion and $ 7.1 billion, including insurance fees.

The official tort claimants committee estimates the value of some 84,000 sexual abuse claims to be about $ 103 billion.

The Boy Scouts of America, based in Irving, Texas, filed for bankruptcy protection in February 2020 in a bid to end hundreds of lawsuits and create a compensation fund for men who have been assaulted as a child by Scout leaders or other leaders.

Lawyers for victims of abuse said early on that they would attack property and assets owned by local councils to contribute to a settlement fund. Local councils, which manage the day-to-day operations of local troops, are not debtors in bankruptcy and are considered legally separate entities by the Boy Scouts, even though they share insurance policies and are considered “parties.” linked ‘in bankruptcy.

Previous Florida Governor Ron DeSantis opposes plan to increase state unemployment benefits by $ 275 per week
Next Details on FEMA's COVID-19 Funeral Expenses Reimbursement Program

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *