Boy Scout Settlement Delays Extend ‘Nightmare’ for Abuse Victims

Bob’s most vivid Boy Scouts memory won’t fade: He was a preteen scout on a trip with his Brooklyn troop when a scoutmaster forced him to perform oral sex. That was more than 60 years ago.

Now retired in Florida, Bob makes do with $1,700 a month from Social Security. He was floored in April to learn he qualified for a $668,000 payout from the bankruptcy trust set up to compensate abused scouts.

“That’s a life-changing amount of money,” said Bob, who talked with Bloomberg Law under the condition his last name not be used. “There are so many things I could do with that money. But here’s the heartache: I’ll never see it.”

More than two years after its launch, one of the largest child sex abuse trusts in US history has sent money to only half of the more than 60,000 middle-aged and elderly men who said they were abused as scouts.

Many were told they’re entitled to hundreds of thousands of dollars, but instead have been paid less than 2% of what they’re owed, as the Scouting Settlement Trust waits out potential legal appeals and fights with insurers. More than 2,000 claimants are older than 80; almost as many have died waiting for closure. Nearly 20,000 claims still have to be reviewed.

The muted rollout of payments and an open-ended cash disbursement timeline has left many anxious and disillusioned with the trust, their own lawyers, and the legal process set up to address the Boy Scouts of America’s history of ignoring rampant child abuse.

“It’s been a total nightmare,” said Mickey, an 82-year-old from Baltimore who said he was molested in his early teens by a scoutmaster and asked to be identified by his childhood nickname. “You’re reliving everything but it’s not coming to an end.”

The $2.46 billion settlement, designed to avoid a mountain of lawsuits, took effect in 2023. It resembled deals forged in dozens of Catholic diocese bankruptcy cases for clergy abuse survivors, determining payouts based on the details of the abuse and trauma.

But the scouting group operated nationally, and its settlement has unique traits that have exacerbated victims’ frustration. Conflicting state laws mean a former scout raped in one state might be awarded an amount 20 times less than one who suffered the exact same abuse in another state.

Trust administrators now say they don’t know how much claimants will receive but “it almost certainly will not” be the amount they’ve been told their claims are worth. The trust has already processed claims that, if paid, would top $7 billion—nearly three times what could be available in the settlement fund.

How big that pool gets largely depends on whether the bankruptcy trustee can wring billions of extra dollars from resistant insurance providers, a battle that could last years. And the timing of any future payments depends on whether a small group of claimants in the next few weeks presses forward with a longshot appeal over the settlement.

Attorneys predict their clients will get much less than what they are owed.

“A lot of survivors are very, very frustrated and I don’t blame them,” said Jordan Merson of Merson Law PLLC, a victims’ attorney in New York.

Avalanche of Claims

Boy Scouts, which this year rebranded as Scouting America, was facing nearly 300 abuse lawsuits when it filed for Chapter 11 in Delaware in February 2020. The bankruptcy came after several states passed laws allowing adults to file previously time-barred lawsuits against their childhood abusers and negligent institutions.

The 115-year-old nonprofit said it anticipated at least 1,700 abuse claims when it entered Chapter 11, but an aggressive blitz of law firm advertising and publicity brought an avalanche of claims. Within a few months, the number of alleged victims topped more than 80,000, though not all the claims would end up before the settlement trust administrators.

Many asserted they were opening up for the first time about being preyed upon as children.

“I really don’t like to talk about what happened because it makes me very angry,” said one former scout, Joseph Jensen, who said he was repeatedly raped by his scoutmaster in Nevada during the 1980s. “I close my eyes and I still see it.”

Despite the size of the claim pool and intense pushback from insurance companies, Boy Scouts pieced together a bankruptcy settlement plan supported by 85% of voting claimants. Confirmed by a Delaware bankruptcy judge in September 2022, the plan went into effect the next year.

Settlement trustee Barbara Houser, a former Texas bankruptcy judge, pleaded for patience that spring as her team set up a system to process and evaluate claims, raise cash through asset sales, and litigate against roughly 90 insurance companies that refused to settle because they questioned many of the claims and valuation methods.

Two years later, Houser is only about two-thirds of the way through claim evaluations and has distributed just over $245 million among 31,000 people. Some of that reflects money sent to about 6,000 claimants who chose onetime payments of $3,500—a common model designed to promise quicker compensation and less scrutiny for claimants willing to accept a smaller payout.

“Every member of the trust team is working as hard as possible to evaluate and determine claims,” Houser told Bloomberg Law in a statement. “We know how important this work is to the thousands of survivors who are finally being heard, recognized and compensated for what they endured.”

The trust’s plan spells out the steps for verifying allegations. Among other things, the claimant must offer proof he was a scout, identify his abuser, and state when and where the acts took place. By late June, Houser’s team had rejected just 519 claims.

Still, frustrated former scouts frequently take to forums on Reddit and group pages on Facebook to vent and ask questions about future payments. Many have filed letters directly to the bankruptcy court to complain about the trust or their own attorneys—whose fees typically equal 30% to 40% of any payout—for failing to provide fulsome updates.

“Your honor, imagine being subjected to six years of legal entanglement, emotional distress and institutional failure—only to be told the compensation you were promised may not come,” a claimant with the initials T.W. said in a letter to the court this year. “My trust in this process has been shattered.”

Legal Hurdles

Beyond its already complicated mandate, the trust has remained at the mercy of lengthy legal battles over the bankruptcy plan. It wasn’t until May that the US Court of Appeals for the Third Circuit affirmed the plan over challenges by insurance companies and 144 victims who want to maintain the right to sue local Boy Scouts councils and sponsor organizations.

Trust operations continued during the bankruptcy appeal, but its distributions were restrained by a lack of access to about $1.5 billion held in escrow until all Chapter 11 plan challenges were completed. Those funds will remain out of reach until at least mid-October, when time runs out for the objecting survivors to appeal to the US Supreme Court.

Tapping the full $2.46 billion bankruptcy settlement won’t address a growing gap between claim values and available funding, even without including the tens of millions of dollars in annual fees owed to the trust administrators. The trust said in court filings in June that it had processed claims totaling $7 billion, but still had tens of thousands of additional claims to evaluate.

Houser has increased trust revenues by selling Boy Scouts property, including a Norman Rockwell painting that went for over $1 million. But the only way she can materially improve claim recoveries is to win in court against approximately 90 insurance companies who could be on the hook for an estimated $4 billion.

“This insurance coverage litigation is extraordinarily complex and unless it is able to be settled on reasonable terms, it could take years to litigate to final conclusion,” the trust reported on its website in June.

Flawed Process

The design of the Boy Scouts bankruptcy plan contained potential pitfalls from the start.

Settlements in similar mass torts, such as one involving USA Gymnastics, operated on a points-based recovery system—assigning points for each wrongful act, then waiting until the settlement funding pool was finalized to calculate how much each point would be worth, and how much money each victim would receive.

In a way, the Boy Scouts claim process reversed those steps—letting claimants know in money terms how much each act of abuse they suffered should be worth, without guarantees they’ll get that payout.

“I’ve never seen anything like that before,” said Timothy Hale, a lawyer with Nye Stirling Hale Miller & Sweet LLP who first represented abuse survivors in diocese bankruptcies nearly 20 years ago and represents 350 former Boy Scouts.

Lawyers say that became part of a recipe for disappointment, especially considering that the organization’s potential liabilities added up to at least $13.5 billion—and could run higher than $70 billion.

“It’s just not possible for everybody to get the full value of their claim,” said Chicago attorney Chris Hurley of Hurley McKenna & Mertz PC. “It’s a brutally difficult situation where nobody is going to leave completely happy.”

The trust’s tiered scale of abuse puts rape at the top and groping and harassment at the bottom, but claim awards can grow based on factors including the frequency of abuse, the perpetrator’s profile, and the mental and physical impact on a victim’s life. A verified claim of rape, for instance, results in a base award of $600,000 and could be enhanced up to $2.7 million if the individual was repeatedly targeted or driven into substance addiction, depression or crime.

But claims aren’t always scaled upwards. For individuals abused in states that haven’t passed the Child Victims Act or similar legislation that extended statutes of limitation for child sex abuse, the trust has been instructed to decrease the value of that claim since it would be inadmissible in civil court.

According to the plan documents, a former scout who was raped in New York or California would deserve at least $600,000. But the same claim could be worth as little as $33,000 if the abuse took place in Oklahoma or Kansas, where hundreds of rapes allegedly occurred.

“For many men, the laws in their state are horrible,” said Paul Mones, a California-based plaintiffs’ attorney. “There’s only a handful of states that have come into the 21st century and realized it takes a long time to come forward.”

A Ticking Clock

About a third of the claimant population is 65 or older, with 2,300 more than 80 years old, according to court papers filed by the trustee. As of early June, more than 2,000 claimants had died, most without receiving any payout, said Houser.

Mones, who represents about 250 ex-scouts, said most attorneys involved in the case have seen 5% to 8% of their clients pass away since the claim process began.

The trust hopes to soon issue a second round of partial settlement payments and anticipates resolving all claims before the end of 2026, Houser said in an emailed response to questions.

But that could be delayed if the Supreme Court takes up an appeal to the bankruptcy plan.

Mickey, the Maryland claimant, had hoped getting a payout of several hundred thousand dollars would be the last he had to think about legal wranglings tied to his childhood abuse.

But the wait means it still has a hold on his life.

“I’d like to live to see some of it,” he said. “But at this rate you just don’t know.”