Boy Scouts of America Files Bankruptcy after Multiple Sexual Abuse Lawsuits
The Boy Scouts of America has applied for bankruptcy protection. The organization reveals that the move is under the group's plan to create a compensation fund for the victims of sexual abuse.
Why File for Bankruptcy?
The move was due to the collection of lawsuits filed against the group. The lawsuits were accusations of sexual abuse. The case alleges that the organization had failed to take precautionary measures of the cases.
Due to the recent move of the organization to apply for bankruptcy protection, all of its lawsuits are currently on hold.
An article from the BBC revealed that the organization had been seen to struggle from its falling trend of memberships due to the number of sexual abuse cases filed against the group.
According to Roger Mosby, the chief executive of the Boy Scouts of America, the BSA sincerely cares for the victims. They had also said their apologies to everyone who was harmed during scouting activities.
Mosby said that the Boy Scouts of America are angered with the members who took advantage of the BSA's programs to abuse innocent children.
In Delaware, the court files included a total of approximately $1 billion of liabilities and more or less $10 billion assets.
The filing was done in accordance with Chapter 22 of the US bankruptcy law. This law allows the organization to continue its operations to help them pay their debts to their creditors.
The declaration of bankruptcy lets the organization to put all of its lawsuits into one court and exert efforts to negotiate settlement of the cases. This saves the company money on having to spend money on individual cases in different courts.
The organization stated that it was creating a trust fund as a form of compensation for the reported victims of abuse.
Mosby included in his statement that the dreadful event cannot be undone for the victims but the organization believes that the Chapter 11 process of law will allow just compensation to all the sexual abuse victims while still following the path of the mission of the BSA.
There are 261 councils of the BSA. All of which operate local troops with individual assets such as land in different states. The bankruptcy move of the BSA also served as a protection for these councils. These councils possess 70 percent of the total assets of the BSA.
According to the BSA, the councils, legally separate and independent in terms of financial matters of the national group, had not applied for bankruptcy.
The Boy Scouts of America
The Boy Scouts of America is the biggest not-for-profit youth organization in the United States of America. It was established in 1910. It has more or less 2.2 million members with ages ranging from 7 to 21.
The organization has approximately 1 million volunteers in its local councils all over the United States.
Some of its former presidents were Rex Tillerson (former Secretary of State) and Robert Gates (Ex-Secretary of Defense).
Other not-for-profit organizations that were involved with many sexual abuse claims include USA Gymnastics and the Catholic Church. These organizations had also applied the Chapter 11 process in the past years and applied for bankruptcy after facing several abuse lawsuits.
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