US Supreme Court Justice Samuel Alito put a temporary pause on the Boy Scouts’ bankruptcy plan at the request of ex-scouts challenging a settlement trust aiming to compensate sex abuse victims.
The administrative stay on Friday halts the Chapter 11 case until the full Supreme Court has had an opportunity to weigh in.
Alleged abuse victims attempting to unwind the bankruptcy say it should wait until after the justices decide another case involving a $6 billion bankruptcy settlement to compensate opioid abuse claims.
The Boy Scout settlement dispute centers on provisions that remove liability for affiliates not formally part of the proposed bankruptcy restructuring. Those favoring the $2.46 billion settlement say the releases are essential to making the plans work.
The justices are considering whether bankruptcy courts can approve such releases in Harrington v. Purdue Pharma, a case involving a settlement against the maker of OxyContin. The case includes releases against the Sackler family, which owns the pharmaceutical giant.
The case is Lujan Claimants v. Boy Scouts of America, U.S., No. 23A741.
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