The Supreme Court has decided not to review a $2.4 billion bankruptcy settlement for the Boy Scouts of America, leaving the agreement intact. This decision, made on Monday (January 12), comes after a group of 75 childhood sex-abuse victims, out of over 82,000 claimants, appealed to the court, arguing that the settlement unlawfully prevented them from suing local scouting groups. These victims wanted to challenge the settlement, drawing parallels to a previous case involving Purdue Pharma, where the court rejected a similar bankruptcy agreement that shielded the Sackler family from lawsuits.
In the Boy Scouts case, the settlement protects third-party organizations, such as local councils and churches, from future lawsuits. Critics argue that such protections are not typically authorized by courts, while supporters claim they are essential for major bankruptcy deals to proceed. The Boy Scouts filed for bankruptcy in 2020 after spending over $150 million on abuse settlements between 2017 and 2019. The settlement was approved by a federal bankruptcy court in Delaware in 2022, allowing the Boy Scouts to emerge from bankruptcy and establish a fund for victims.
Lower courts, including the 3rd US Circuit Court of Appeals, upheld the settlement agreement. The Supreme Court had previously rejected an emergency appeal from the same group of victims in early 2024.
The settlement fund is one of the largest child sexual abuse settlements in U.S. history, with more than $8 million already paid out to survivors. The decision to uphold the settlement allows these payments to continue.
The Supreme Court’s decision means that the settlement will remain in place, providing compensation to survivors while shielding third-party organizations from future lawsuits.
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