The US Supreme Court recently vacated an order by Justice Samuel Alito that had paused the legal dispute around the $2.46 billion settlement between sexual abuse victims and the Boy Scouts of America (BSA).
The BSA declared bankruptcy in 2020, amid thousands of lawsuits for sexual abuse against Scout Leaders. Most of these claims were brought forth by Abused in Scouting, a group dedicated to litigating sexual abuse claims against BSA.
In April 2023, the BSA announced a reorganization trust that resulted from the bankruptcy proceedings. This plan allocates approximately $2.4 billion to abuse survivors. The plan’s provisions include a clause removing liability for non-debtor affiliates without consent from the affected parties. The settlement was later upheld by a federal court.
That said, on appeal of this reorganization plan, victims argued the plan’s unlawful nature, since it offers immunity to third parties involved in the abuse that are not in bankruptcy such as insurers, local Scout councils, and churches that ran scouting programs. The victims requested the Supreme Court to pause the bankruptcy plan while it deliberates on a similar issue in Harrington v. Purdue Pharma LP that involves the bankruptcy plan of the maker of the opioid OxyContin which also shares a similar provision.
However, since the Supreme Court has now denied the stay, the case will move forward to the US Court of Appeals for the Third Circuit. The hearing for the appeal is slated to be on April 9.