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News Regarding the Recent Bankruptcy Court Opinion on the BSA Reorganization Plan


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Chicago, IL 60603
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Dear HMM Clients:  We have reviewed the nearly three-hundred page Court Opinion by Judge Silverstein regarding the Boy Scouts of America Reorganization Plan.  The Court approved most aspects of BSA’s Plan. However, the order is not final, as the BSA will need to change certain aspects of the Plan and will need to obtain the agreement of all parties in order to change those parts of the Plan. Below is a summary of the various aspects of the Opinion, along with the Court’s findings.

HMM’s Chris Hurley shares the latest on the BSA’s bankruptcy.

Trustees: The Court approved Barbara Hauser as Trustee with Michael Reagan and Diane Welsh assisting.

STAC (Settlement Trust Advisory Committee): The Court kept in place the STAC. Chris Hurley from our office is the Chairman of this committee, giving us an important role in further negotiations. Critically, the STAC will have significant say in future settlements with insurers and chartering organizations.

Fraud: The Court specifically instructed the Trustee to formulate a process for weeding out fraudulent claims. We have already begun working on ways in which we can assist in this process, based upon our years of experience in cases like this.

Local Council Settlements: The Court approved the approximately $665 million contribution from the Local Councils.

Methodist Contribution: The Methodists have agreed to contribute $30 million and raise an additional $100 million from various chartering organizations. The Court approved this resolution.

Insurance Settlements: The settlements with Hartford, Century, Clarendon, and Zurich, which total $1.656 billion were approved.

TCJC (The Church of Jesus Christ of Latter-day Saints): The Court did not approve the TCJC settlement. The Court found the release TCJC sought was too broad and released claims unrelated to Scouting. We expect there will be further talks on this front.

IRO (Independent Review Option): The Court kept in place the IRO and $20,000 in fees associated with that process. This is specifically for claims in open states with values exceeding $1 million.

Channeling Injunction: A channeling injunction essentially channels claims to the Trust, rather than State Court. The Court approved this for: 1) all claims arising after January 1, 1976; 2) all claims arising before January 1, 1976 that implicate the insurance of any settling insurer (Hartford, Century, Clarendon, and Zurich).

What’s Next?: We are meeting with the TCC over the next several weeks to determine the next steps. The Plan will need to be revised in order to comply with the Court’s findings.

Townhall: HMM will be holding a townhall for our clients in the next few weeks about what to expect moving forward. Details will follow with a Zoom invitation.

Please continue to take care of yourselves. As always, we appreciate your patience in this complicated case.


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