DOVER, Del. – The Boy Scouts of America on Thursday reached an agreement with attorneys representing victims of child sex abuse, doubling its initial offer of compensation to $850 million.
According to The Wall Street Journal, the Boy Scouts offered the cash and other assets to survivors and is signing over insurance rights to a trust that would administer claims and distribute payments, according to an agreement filed in bankruptcy court on Thursday.
The proposed deal “ensures we have the overwhelming support of survivors” to emerge from bankruptcy, the Boy Scouts said in a statement. The deal must be approved in a creditor vote and win approval from the U.S. Bankruptcy Court in Wilmington, Delaware, to take effect, The Wall Street Journal reported.
The settlement plan would rank among the largest in U.S. history over sexual abuse, according to The Associated Press.
Paul Mones, an attorney representing some of the survivors, told USA Today that with insurance contributions, the amount of the settlement could surpass $1 billion.
Attorneys for the Boy Scouts filed court papers late Thursday outlining a restructuring support agreement with attorneys representing abuse victims, the AP reported.
“After months of intensive negotiations, the debtors have reached resolution with every single official and major creditor constituency in these Chapter 11 cases,” Boy Scouts of America attorneys wrote.
More than 84,000 people are part of the lawsuit against the Boy Scouts, which has been plagued with claims of abuse from volunteers and leaders since the 1960s, NBC News reported. The Boy Scouts of America filed for Chapter 11 bankruptcy last year as it faced increasing legal fees to defend itself against claims of sexual abuse against boys, the network reported.
Ken Rothweiler, a Philadelphia attorney who represents the largest group of claimants — more than 16,800 people — told NBC News that the settlement was a start.
“I am pleased that both the BSA and their local councils have stepped up to be the first to compensate the survivors,” Rothweiler said in a statement. “We will now negotiate with the insurers and sponsoring and chartering organizations who have billions of dollars in legal exposure, of which a substantial portion is necessary to fairly compensate the survivors.”
Rothweiler added that the majority of his clients are in their 60s and 70s, and that the abuse occurred while they were teenagers, NBC News reported.
Insurers including Chubb Ltd.‘s Century Indemnity Co., Travelers Cos. and American International Group Inc. said in court papers filed Thursday they were excluded from closed-door talks on the proposed deal, according to The Wall Street Journal. The companies alleged the Boy Scouts had “turned over the pen” to victims’ lawyers to set the terms under which abuse claims will be valued and paid.
“With only the fox guarding the henhouse, the outcome is utterly at odds with what BSA itself asserted was necessary for a confirmable plan and is permissible under the bankruptcy code,” the insurers wrote.
The Boy Scouts said that the proposal “will equitably compensate survivors and ensure scouting’s future by resolving past abuse cases for both the national organization and local councils.”