WASHINGTON (CN) — The Supreme Court refused on Thursday to put the Boy Scouts of America’s $2.46 billion settlement for assault victims on pause while considering a similar bankruptcy deal.
A group of abuse victims urged the justices to pause the Boy Scout’s bankruptcy deal while the victims’ challenge to the plan proceeds. Representing 144 individuals who suffered childhood sexual abuse, the group claimed their case would be impacted by the court’s review of Purdue Pharma’s bankruptcy plan.
The justices did not explain why they denied the victims’ application. There were no noted dissents.
The Boy Scouts is one of the largest youth organizations in the country, but for decades the group ignored sexual abuse claims. A reckoning came in 2020, however, when the organization was forced to file for Chapter 11 bankruptcy to settle over 80,000 claims of sexual assault against the group and its connected organizations.
While the Boy Scouts filed for bankruptcy, none of the local councils, chartered organizations or insurers faced the same fate.
In 2022, a bankruptcy court confirmed a plan to channel injunctions and releases into a settlement trust for all abuse claims against the Boy Scouts and the local councils, chartered organizations and insurers. Some of the groups contributed hundreds of millions of dollars to the trust, but over 100,000 organizations paid no cash contributions to the settlement.
In total, the settlement trust was estimated to exceed $2.46 billion, the largest sexual abuse compensation fund in the history of the United States.
Similar to the challenge to Purdue’s bankruptcy deal for opioid victims, the Boy Scouts plan uses non-consensual, non-debtor third-party releases. This provision releases non-debtors from liability without the consent of all the claim holders.
The victims claim the bankruptcy court does not have the authority to authorize these releases — the same question the justices will answer in Purdue’s case.
Two lower courts rejected multiple attempts to pause the bankruptcy plan while the victims pursued their case. The victims said without the pause they would be forced to pay $10,000 for an independent review of their claims.
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