Sexual abuse settlements have already strained the Boy Scouts’ finances to the point where the organization is exploring “all available options,” including Chapter 11 bankruptcy. But now the financial threats have intensified.
The reason: States have been moving in recent months to adjust their statute-of-limitations laws so that victims of long-ago sexual abuse can sue for damages. New York state has passed a law that will allow such lawsuits starting in August. A similar bill in New Jersey has reached the governor’s desk. Bills also are pending in Pennsylvania and California.
In New York and elsewhere, lawyers are hard at work recruiting clients to sue the Boy Scouts, alleging they were molested as youths by scoutmasters or other volunteers.
A bankruptcy by the Boy Scouts could be unprecedented in its complexity, potentially involving plaintiffs in virtually every state, according to several lawyers. It would be national in scope, unlike the various Catholic Church bankruptcy cases in the U.S., which have unfolded diocese by diocese.
“A Boy Scout bankruptcy would be bigger in scale than any other sex abuse bankruptcy,” said Seattle-based attorney Mike Pfau, whose firm is representing more than 300 victims in New York state.