Boy Scouts may face suit
NEW YORK — The lawyers’ ads on the internet aggressively seeking clients to file sexual abuse lawsuits give a taste of what lies ahead this year for the Boy Scouts of America: potentially the most fateful chapter in its 109-year history.
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.
Plaintiffs’ lawyers “recognize that this is a very unique and lucrative opportunity,” said attorney Karen Bitar, who formerly handled sex-crime cases as a prosecutor in Brooklyn before going into private practice.
Attorney Tim Kosnoff, a veteran of major sexual abuse lawsuits against the Roman Catholic Church, said Tuesday that he and his team have signed up 186 clients from dozens of states in just the past few weeks who want to be part of litigation against the Boy Scouts. Kosnoff said 166 of them identified alleged abusers who have not been named in any of the Boy Scout files made public in past years.
Boy Scouts spokeswoman Effie Delimarkos said the organization continues to evaluate its financial situation, and she defended its current abuse-prevention policies. The organization serves more than 2.2 million youths.
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.
Jeffrey Schwartz, a New York-based bankruptcy expert with the firm McKool Smith, said the Boy Scouts don’t have a particularly large flow of cash and might be forced to sell off property in bankruptcy. The Boy Scouts have extensive land holdings, including camping and hiking terrain.
“They’ll play for time,” Schwartz said. “If their defense costs and settlement costs are greater than their membership fees, it could be a death spiral.”
However, Dallas-based trial attorney Michelle Simpson Tuegel, part of a team representing numerous sex abuse survivors, said bankruptcy might benefit the Boy Scouts and reduce any payouts to plaintiffs.