The Battle over Boy Scouts’ Bankruptcy Plan Escalates: Insurers Accuse the Organization of Acting in Bad Faith


The confirmed plan also includes significant differences in the treatment of the insurers’ contractual rights, according to Boutrous. This includes the elimination of the right of the insurers to defend against claims that implicate their policies, as well as the obligation of the Boy Scouts to cooperate in these defense efforts. Under the plan, the settlement trustee overseeing the $2.5 billion fund and the claims adjudication process is supposed to receive the insurers’ rights, as well as the Boy Scouts’ obligations, but Boutrous argues that the settlement trustee will have all the power, while the insurers will be unable to act.

In response, Boy Scouts attorney Glenn M. Kurtz from White & Case LLP stated that the bankruptcy court did examine all of the circumstances and entered findings supporting the good faith of the debtor. Kurtz added that there is no evidence to support the claim that any claims are invalid. The trust distribution procedures, according to Kurtz, include guardrails to prevent invalid or bad faith claims from being approved. The bankruptcy court, he says, heard weeks of testimony, reviewed over 1,000 exhibits, and heard six days of closing arguments before issuing a 260-page opinion that addressed all of the issues raised by the insurers.