Appeals court rejects challenge to Boy Scouts’ $2.46 billion abuse settlement plan.
The Boy Scouts of America will not have to face further legal challenges from a small group of survivors who opposed its bankruptcy settlement plan. A federal appeals court has ruled against those survivors, stating that while their pain is undeniable, it’s too late to undo the deal that has been in motion for years. The court acknowledged that nothing can truly make up for the trauma these individuals suffered, but said the current arrangement allows them at least a partial path to compensation.
The case stems from the massive wave of sexual abuse claims that forced the Boy Scouts into bankruptcy in 2020. Thousands of men came forward, saying they were abused as children while involved with the organization. In response, the Boy Scouts created a $2.46 billion fund as part of a bankruptcy plan to compensate victims. That deal was supported by a large majority of survivors—around 86%—but not everyone agreed with its terms. A group of about 144 survivors tried to challenge the deal, saying it wasn’t fair and that it let too many responsible parties off the hook.
One of the biggest issues was that, under the plan, victims had to give up their right to sue certain people and organizations in the future. These included the Boy Scouts’ insurers, local scout councils, and the sponsors of individual troops. In exchange, these groups contributed to the settlement fund. For example, local councils added more than $500 million in cash and property. Two insurance companies, Century Indemnity and The Hartford, together added over $1.5 billion. The Boy Scouts themselves, however, contributed only a small share of the total fund.
Those opposed to the plan said survivors shouldn’t be forced to give up their rights just to get compensation. Their lawyer argued that it was wrong to shield people and groups who hadn’t even declared bankruptcy. The idea that non-bankrupt organizations could get liability protection simply by chipping into the fund was seen by some as deeply unfair.
Still, the court said that at this stage, the deal is too far along to change. Since the plan was already approved by a bankruptcy judge in 2022 and then upheld by a federal court in 2023, any attempt to reverse it now would cause too much disruption. Judge Cheryl Krause, who wrote the decision, pointed out that a recent Supreme Court ruling in a separate case might have helped the survivors if the timing had been different. That case, involving Purdue Pharma and the opioid crisis, said that wealthy individuals couldn’t block lawsuits just by using bankruptcy rules. But the Boy Scouts’ plan was already finalized before that ruling came down.
In her opinion, Krause said the court understands how difficult it must be for survivors to accept this outcome. But she also stressed that bankruptcy law often leads to tough outcomes, and in this case, undoing the plan would hurt more survivors than it would help. Thousands have already received payouts under the agreement, and a reversal could take those away.
The other two judges who agreed with the ruling were appointed by Presidents Clinton and Reagan, showing that the decision crossed political lines. Both sides of the case were represented by experienced lawyers, but neither the survivors’ attorney nor the Boy Scouts’ legal team commented immediately after the decision came down.
This case closes another chapter in a long and painful story. While many survivors have received money through the fund, others feel they were forced into a deal they didn’t agree with, just to have any chance at justice. For them, this ruling brings frustration, not closure. And while the organization continues to operate under its new structure, the weight of its past remains, with many still carrying the scars of what they endured.
Sources:
Third Circuit rejects sex abuse victims appeal of Boy Scouts bankruptcy deal
Boy Scouts abuse settlement survives insurer and claimant appeals
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