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Suits remain halted, mediation eyed in Boy Scouts bankruptcy

DOVER, Del. — The judge presiding over the Boy Scouts of America bankruptcy has approved an agreement among attorneys to extend an injunction halting child sex abuse lawsuits against the organization’s 261 local councils until Nov. 16.

Under the agreement approved Monday, local councils wanting continued protection from litigation must sign agreements by July 6 requiring them to provide information to the Boy Scouts about their finances, including real estate holdings, for sharing with creditor committees.

The local councils, which run day-to-day operations for local troops, are not listed as debtors in the bankruptcy and are considered by the Boy Scouts to be legally separate entities, even though they are “related parties.” Attorneys for abuse victims have made clear that they will try to go after campsites and other properties owned by the local councils to contribute to the fund for victims.

Judge Laurie Selber Silverstein will hear any objections to the extension of the injunction at a July 9 hearing.

The Nov. 16 extension date corresponds with the deadline for victims of child sex abuse to file claims in the bankruptcy case.

The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection in February in an effort to halt hundreds of individual lawsuits and create a huge compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.

More than 12,000 boys have been molested by 7,800 abusers since the 1920s, according to Boy Scout files revealed in court papers. Attorneys have indicated that there could be at least 7,000 claims filed in the bankruptcy case.

James Stang, an attorney for the official committee representing abuse survivors, said Monday that his committee and the official committee for unsecured creditors are anticipating a “substantial” data download from the Boy Scouts related to the local councils.

An ad hoc committee representing the local councils already has provided some information on a confidential basis, Stang said. Similarly, the information provided by local councils pursuant to the injunction extension will be subject to a protective order.

Stang told the judge that if the creditor committees don’t get the information they need from the local councils, they will seek discovery through the normal court process.

Also Monday, Silverstein appointed a three-person mediation panel that will try to resolve certain issues in the bankruptcy case through voluntary mediation instead of costly litigation.

Silverstein appointed two of the three mediators proposed by the Boy Scouts and the official committees but chose former Delaware bankruptcy judge Kevin Carey for the third spot.

The other mediators are Paul Finn and Tim Gallagher. Finn runs a Massachusetts mediation firm and has significant experience in Catholic diocese and other cases involving child sex abuse claims. Gallagher is a California lawyer who specializes in mediation involving complex insurance disputes.

Attorneys for the Boy Scouts said issues ripe for initial mediation include disputes over whether certain Boy Scouts properties should not be made available to satisfy creditor claims. The Boy Scouts believe those properties include “High Adventure” bases such as the Philmont Scout Ranch in New Mexico, the Florida Sea Base aquatic facility, and the Northern Tier wilderness area in northern Minnesota and Canada.

“The debtors should not be forced to monetize those assets to satisfy the claims of creditors,” said Boy Scouts attorney Jessica Boelter.

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