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

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The appeals arguments will continue on Friday, with the parties addressing issues surrounding a channeling injunction and third-party releases included in the plan. The Boy Scouts of America filed for bankruptcy three years ago due to hundreds of claims for childhood sexual abuse stretching over several decades. After an advertising campaign led by plaintiffs’ attorneys, the number of asserted claims increased to 82,000. A Delaware bankruptcy judge confirmed a plan in September that featured settlements with some large insurers and groups representing thousands of claimants to fund a $2.5 billion settlement pot.

The appeals from over a dozen nonsettling insurers were consolidated in the Delaware district court, and are being represented by numerous law firms, including Gibson Dunn & Crutcher LLP and Fineman Krekstein & Harris PC. On the other hand, the Boy Scouts are being represented by Morris Nichols Arsht & Tunnell LLP and White & Case LLP.

Investigative reporter, Samuel Lopez, from the USA Herald, has been closely following the case and notes that the insurers’ accusations of bad faith raise questions about the validity of the confirmed plan and the impact it may have on both