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Boy Scouts abuse settlement faces questions as US Supreme Court weighs Purdue appeal

Reporter: Reuters

 Boy Scouts abuse settlement faces questions as US Supreme Court weighs Purdue appeal

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The statue of a scout stands in the entrance to Boy Scouts of America headquarters in Irving, Texas, February 5, 2013. REUTERS/Tim Sharp Acquire Licensing Rights Summary Companies Law Firms Some abuse survivors want to delay Boy Scouts $2.46 billion bankruptcy settlement Purdue and Boy Scouts bankruptcies depend on contributions from non-bankrupt people and organizations Abuse survivor sought to pursue $120 million payment from Boy Scouts insurers Sept 12 (Reuters) - The Boy Scouts of America's $2.46 billion sex abuse settlement is facing new legal uncertainty as the U.S.

Supreme Court weighs how far bankruptcy courts can go to protect non-debtors, a fact acknowledged on Tuesday by the judge overseeing the youth organization's bankruptcy. Chief U.S. Bankruptcy Judge Laurie Silverstein said at a court hearing in Wilmington, Delaware, that she would continue to hear disputes related to the Boy Scouts settlement without waiting for a Supreme Court decision in the case of Purdue Pharma.

The drugmaker is seeking to resolve thousands of lawsuits related to its allegedly deceptive marketing of the addictive painkiller Oxycontin in bankruptcy. The high court agreed in August to hear a challenge by the Biden administration to the legality of Purdue's bankruptcy settlement, putting on hold a deal that would shield its wealthy Sackler family owners from lawsuits over their alleged roles in the country's opioid epidemic.

They have denied wrongdoing. Abuse claimants opposed to the Boy Scouts' settlement on Friday had asked U.S. District Judge Richard Andrews to issue a stay that would stop the settlement from moving ahead until the Supreme Court ruling in Purdue, saying that the settlement should not cut off their ability to sue non-bankrupt organizations, such as churches who co-sponsored Scouting programs. But, Silverstein noted on Tuesday that the Boy Scouts, unlike Purdue, had already exited bankruptcy, creating uncertainty about whether and how a future Supreme Court decision could retroactively impact the Boy Scouts bankruptcy. "Whether Purdue will impact that or not, I don't know because Purdue never went effective," Silverstein said.

"This plan's gone effective. The Boy Scouts organization filed for bankruptcy in February 2020 after several U.S. states enacted laws allowing accusers to sue over decades-old sex abuse allegations, prompting a wave of litigation that threatened the 113-year-old organization's continued existence. The youth organization emerged from bankruptcy in April after court approval of the $2.46 billion settlement supported by 86% of the 80,000 claimants who said they were abused as children by troop leaders. The Supreme Court, which is scheduled to hear the Purdue case in December, will consider whether U.S.

bankruptcy law allows Purdue's restructuring to include legal protections for the Sackler family owners, who have not filed for bankruptcy, in exchange for an up-to $6 billion contribution to Purdue's bankruptcy settlement. The Boy Scouts' bankruptcy plan offers similar legal protections for insurers, local Boy Scouts councils, churches and other related organizations that have been named as co-defendants in sex abuse lawsuits and have contributed funds to the settlement. While a majority of abuse claimants and insurers supported the Boy Scouts bankruptcy settlement, a relatively small group of sexual abuse claimants and insurers have appealed parts of the Boy Scouts' bankruptcy settlement. The Boy Scouts said in a Friday court filing that the settlement has already been funded and finalized, and that it is poised to provide payments and closure to survivors of abuse who have suffered for decades.

The settlement trust has begun processing requests for payment from claimants who chose a $3,500 "quick pay" option from the settlement, but has not provided a timeline for making other payments. Silverstein also said Tuesday that she intended to rule on an abuse survivor's attempt to collect on a $120 million court judgment that he won against his abuser in 2017.

The Boy Scouts settlement trustee opposed the action, saying it interfered with insurance settlements meant to compensate all Boy Scouts of America abuse victims. The case is In re Boy Scouts of America, U.S. Bankruptcy Court for the District of Delaware, No. 20-10343. For the settlement trustee Barbara Houser: Emily Grim of Gilbert For abuse survivor JFH: Randall Rhodes of Rouse Frets White Goss Gentile Rhodes; and Samuel Grego and William Adams of Dickie, McCamey & Chilcote For the Boy Scouts: Jessica Lauria, Mike Andolina, Matt Linder and Laura Baccash of White & Case; and Derek Abbott and Andrew Remming of Morris, Nichols, Arsht & Tunnell Read more: US Boy Scouts exits Chapter 11 bankruptcy after abuse settlement Boy Scouts' record $2.46 bln sex abuse settlement upheld by judge US Supreme Court halts Purdue Pharma bankruptcy settlement pending review Reporting by Dietrich Knauth Our Standards: The Thomson Reuters Trust Principles.

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