A federal district court in Delaware ruled Tuesday against dozens of insurance companies that objected to a $2.46 billion trust for sexual abuse victims set up by a bankruptcy court for the Boy Scouts of America, saying there was no evidence the settlement did not reached in good faith.
Judgment of the United States District Court in Wilmington i In re: Boy Scouts of America BSA LLC, Debtors concerned the Wilmington bankruptcy court’s September 2022 order, which confirmed a reorganization plan that included a global settlement of sexual assault claims.
The 155-page ruling by Judge Richard G. Andrews said the plan channeled into the settlement relies on all abuse claims against the Boy Scouts of America and related entities and those covered by the insurance companies, noting that there are 82,209 “unique and current claims”; that claims abuse.
The bankruptcy court settlement provides at least $2.46 billion in cash and property to the trust, plus unliquidated assets, including insurance rights worth up to more than $4 billion, the ruling said.
“If upheld, the plan will ensure the survival of an American institution,” the ruling said.
Two groups of non-regulatory insurers opposed the plan.
Objecting insurers “argue on many fronts that the plan did not meet the requirements for affirmance, and I have carefully considered each of these arguments,” the ruling said.
“Based on the record, appellants have failed to present evidence that would demonstrate a clear error in the bankruptcy court’s careful findings of fact,” the ruling said.
The insurance companies “did not introduce any evidence of collusion or that any claims were fraudulent,” the ruling said. “In addition, the bankruptcy court found that BSA did not cooperate with the survivor’s counsel based on a careful review of the record,” and the insurers “did not introduce evidence to the contrary,” the judge said in affirming the bankruptcy court.
Several lead attorneys in the case had no comment or did not respond to a request for comment.