Boy Scouts files amended Chapter 11 plan following court opinion

By Sarah Lizee

Olympia, Wash., Aug. 15 – Boy Scouts of America (BSA) amended its Chapter 11 plan following a court opinion approving most of the terms and denying others, according to court documents filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, judge Laurie Selber Silverstein said in the opinion that she found the plan was proposed in good faith but that it would require some modifications.

One of the required modifications is in regard to the Church of Jesus Christ of Latter-day Saints (TCJC) settlement. Silverstein had said the releases in the settlement were too broad.

The BSA said the TCJC’s inclusion in the plan as a “contributing chartered organization” will be changed to a “participating chartered organization,” and as such TCJC will be deemed a “limited protected party,” rather than a “protected party” in regard to the releases. The $250 million TCJC contribution has been removed from the plan.

The BSA also made some technical modifications to the plan and conforming modifications to the trust distribution procedures and the settlement trust agreement in line with the court’s opinion.

In its opinion, the court found that the BSA's liability for abuse claims is likely between $2.4 billion and $3.6 billion, and approved settlements that will provide for initial funding of $2.28 billion to survivors, including $78 million from the BSA, $515 million from local councils, $30 million from the United Methodist Church and $1.66 billion from settling insurers.

Under the plan, holders of other priority claims will receive payment in cash in full or other treatment leaving the claims unimpaired, including reinstatement.

Holders of administrative expense claims, professional fee claims and priority tax claims will be paid in full.

Holders of other secured claims will receive payment in full in cash, reinstatement of their claims, or the collateral securing their claims.

Holders of class 3A 2010 credit facility claims will receive a claim under the restated credit facility documents in an amount equal to the amount of such holder’s allowed 2010 credit facility claim.

Holders of class 3B 2019 revolving credit facility claims will receive a claim under the restated credit facility documents in an amount equal to the amount of such holder’s allowed 2019 revolver claim.

Holders of class 4A 2010 bond claims will receive a claim under the restated 2010 bond documents in an amount equal to the amount of such holder’s allowed 2010 bond claim.

Holders of class 4B 2012 bond claims will receive a claim under the restated 2012 bond documents in an amount equal to the amount of such holder’s allowed 2012 bond claim.

Holders of convenience claims will receive cash in an amount equal to 100% of their claims.

Holders of general unsecured claims will receive, subject to their option to elect convenience claim treatment, their pro rata share of the $25 million core value cash pool up to the full amount of their claims.

Holders of non-abuse litigation claims will, subject to their ability to elect convenience claim treatment, retain the right to recover up to the amount of their claims from available insurance coverage or the proceeds of any insurance policy, including any abuse insurance policy or non-abuse insurance policy, applicable proceeds of any insurance settlement agreements, and co-liable non-debtors, if any, or their insurance coverage. If holders of non-abuse litigation claims fail to recover in full from these sources, they may elect to have the unsatisfied portion of their claims treated as a convenience claim and receive cash in an amount equal to the lesser of the amount of the unsatisfied portion of the claim and $50,000.

Each holder of direct and indirect abuse claims will have their claims permanently channeled to the settlement trust.

Interests in the Delaware BSA will be reinstated.

A status conference is scheduled for Aug. 24.

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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