Boy Scouts of America plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Feb. 7 – Boy Scouts of America’s (BSA) Chapter 11 plan drew an objection Monday from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to court documents filed with the U.S. Bankruptcy Court for the District of Delaware.

Vara said the plan’s non-consensual third-party releases, which release claims against numerous non-debtor parties other than the perpetrators of abuse, violate the due process clause of the fifth amendment to the U.S. constitution.

He also said the plan’s non-consensual third-party releases are not authorized by any provision of the bankruptcy code, and they do not comply with third circuit precedent.

The U.S. trustee added that the plan impermissibly seeks to treat plan provisions, and the plan itself, as a “settlement” subject to the standards of federal rule of bankruptcy procedure 9019.

The plan also contains impermissibly broad exculpation provisions, and provides for the payment of certain professionals’ fees and expenses without satisfying the standards of bankruptcy code and contrary to existing rulings in this case, Vara said.

The plan confirmation hearing is scheduled for Feb. 22.

Boy Scouts of America is based in Irving, Tex. It filed bankruptcy on Feb. 17, 2020 under Chapter 11 case number 20-10343.

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