Boy Scouts Bankruptcy Exposes Court Split on Liability Releases

A recent decision allowing entities tied to the Boy Scouts of America to be released from sexual abuse claims has reignited debate over a controversial bankruptcy tactic and raised the stakes of an upcoming appellate court ruling involving Purdue Pharma LP.

Judge Laurie Selber Silverstein of the US Bankruptcy Court for the District of Delaware, in a long-awaited opinion released July 29, approved the bulk of the Boy Scouts’ intricate reorganization plan and $2.7 billion settlement with 82,000 adults who allege they were sexually abused in their youth as scouts.

Her ruling coincides with a question pending before the US ...