Boy Scouts Abuse Claimants Seek Plan Pause Amid Purdue Review

A group of Boy Scouts of America sex abuse claimants renewed their request to pause the organization’s bankruptcy settlement plan in light of the US Supreme Court’s decision to hear a challenge to Purdue Pharma LP’s $6 billion opioid deal.

The high court last week said it will weigh whether the US bankruptcy code permits releases of claims—without claimants’ consent—against people and entities that have connections to a bankrupt company but aren’t themselves bankrupt.

Such third-party, nonconsensual discharges—which the Purdue plan provides the company’s Sackler family owners—are among the most hotly debated issues in Chapter 11 bankruptcy. They were a major sticking point in the Boy Scouts’ bankruptcy plan, which was designed to settle decades’ worth of sex abuse claims filed by former Scouts.

The Boy Scout claimant group said Wednesday that the youth organization’s $2.64 billion plan should be put on hold because a decision in Purdue could happen while its own case is on appeal.

“A stay of the plan would conserve funds which would otherwise be spent implementing a plan that may be invalidated should the Supreme Court rule against nonconsensual third party releases,” the Boy Scout claimants told the US Court of Appeals for the Third Circuit in court papers Wednesday.

The Boy Scout claimants said the settlement trust set up to hand out funds to survivors hasn’t yet paid out the money, so a pause won’t harm claimants. Tens of thousands of former Boy Scouts are poised to be compensated for sex abuse they say they suffered as children.

The Boy Scouts in April announced that the settlement went into effect. The Third Circuit refused the claimants’ initial request to pause the bankruptcy plan.

The justices said they’ll hear the Purdue case in December.

The case is In re: Boy Scouts of America and Delaware BSA LLC, 3d Cir., No. 23-01664, motion 8/16/23.