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Local Boy Scout leaders remain positive despite bankruptcy filing

Boy Scouts of America filed for bankruptcy protection early Tuesday amid declining membership and a drumbeat of child sexual abuse allegations that have illuminated the depth of the problem within the organization and Scouts’ failure to get a handle on it. [USA Today photo]
Boy Scouts of America filed for bankruptcy protection early Tuesday amid declining membership and a drumbeat of child sexual abuse allegations that have illuminated the depth of the problem within the organization and Scouts’ failure to get a handle on it. [USA Today photo]

Local leadership of the Boy Scouts of America said Tuesday area activities will continue for the foreseeable future in the wake of the national organization's filing for bankruptcy protection amid declining membership and a drumbeat of child sexual abuse allegations.

“We’ve known that this was a possibility for a while so we’ve been prepared to answer questions,” said Jeff Woolsey, Scouting executive and CEO for the Last Frontier Council, which directs Scouting in central, western and southwestern Oklahoma.

“Is it going to affect us here locally? No, it’s not. In the long-term, no one knows, but we are locally owned. All of our support comes from here and doesn't go to the national office. All of our troops are functioning as normal.”

After months of speculation and mounting civil litigation, the Chapter 11 filing by the Scouting organization's national body was unprecedented in both scope and complexity. It was filed in Delaware Bankruptcy Court overnight.

The exact effects on Boy Scouts' future operations are unknown, leading to speculation about the organization's odds for survival, the impact on local troops and how bankruptcy could change the dynamic for abuse survivors who have yet to come forward.

Some fear that at a minimum it will prevent survivors from naming their abuser in open court.

“They’re going into bankruptcy not because they don’t have the money,” said Tim Kosnoff, who has tried thousands of child abuse cases, including many against the Boy Scouts and Catholic Church. “They’re going into bankruptcy to hide ... a Mount Everest in dirty secrets.”

In court filings, the Boy Scouts said it faces 275 abuse lawsuits in state and federal courts around the country, plus another 1,400 potential claims.

In a statement, the organization said: "The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting."

"The BSA intends to use the Chapter 11 process to create a Victims Compensation Trust that would provide equitable compensation to victims."

The group said it paid $150 million in settlements and legal costs from 2017 to 2019.

The Last Frontier Council counts more than 12,000 youth and more than 4,000 volunteer Scouters and adults as part of its local organization.

Woolsey told The Oklahoman that leaders believe the victims, and they should be fairly compensated.

“We care for victims,” he said. “We’re outraged that any adult used our programs to harm a child and we just feel horrible that any child was harmed. The safety of the children involved and the safety of the adults involved — that's one of our highest priorities.

"It's too bad there are people in the world that will do this to children and it's too bad they will target organizations children are a part of, but it happened.”

The national organization said Scouting programs will continue "throughout this process and for many years to come. Local Councils are not filing for bankruptcy as they are legally separate and distinct organizations."

It is exactly that distinction that victims' attorneys say will form the core of the legal battle ahead over which assets Boy Scouts must use to pay legal settlements and which can be shielded. The primary debate, they say, will center on property owned by the 266 regional councils and local troops.

Reports of a potential bankruptcy first emerged at the end of 2018, with rumors that the nonprofit youth organization would follow in the footsteps of the Catholic Church, which has faced similar claims of abuse. But unlike the Catholic bankruptcy cases, in which more than 20 individual dioceses have filed for protection, the Boy Scouts’ case will play out on a national level.

Many saw the Scouts’ increase in annual membership fees in October, from $33 to $60, as evidence of financial trouble.

Then on Jan. 1, the Church of Jesus Christ of Latter-day Saints — which for 100 years was among Boy Scouts’ largest partners — followed through on its plan to pull hundreds of thousands of Mormon youth out of Scouts in favor of its own youth program. That withdrawal caused an 18% drop in membership overnight, to fewer than 2 million.

But the nonprofit organization's chief financial concern, according to victims’ attorneys and bankruptcy experts, is rising liability from abuse lawsuits. The suits have led to battles with insurance carriers, who refused to pay out claims saying the Scouts failed to take effective preventive measures to stop the abuse. In 2018, Boy Scouts sued six of its carriers.

“The problem with Boy Scouts is they're caught in a vice grip of, on one hand, having insurance companies not paying on these claims that Boy Scouts have already settled, and second having dwindling economic resources on account of paying out money for sexual abuse settlements,” said attorney Paul Mones, who has tried dozens of high-profile cases against Boy Scouts.

The Scouting organization has been deeply mired in civil litigation since a landmark case in 2010 that resulted in $19.9 million in damages, the largest ever for a single individual against the Boy Scouts. That case triggered the release of more than 20,000 confidential documents, which became known as the “perversion files.”

Those records named more than 1,000 banned volunteers, revealing that the 100-year-old organization had kept track of suspected and known abusers and failed to consistently report them to police or inform parents or the public of the extent of the problem.

While the bankruptcy filing has long been viewed by some legal experts, and even victims’ attorneys, as the best and most likely course of action, it’s a controversial move for one of the country’s most influential youth organizations.

Boy Scouts currently faces hundreds, if not thousands, of abuse lawsuits. New allegations poured in as efforts to extend the civil statute of limitations for survivors of child sexual abuse gained momentum in recent years.

Thirty-eight states have amended their statute of limitations since 2002, with 10 eliminating a civil statute of limitations altogether and 16 reviving expired statutes, according to CHILD USA, a think tank focused on preventing child abuse and neglect.

New York's Child Victims Act opened a one-year window in August for lawsuits from child sexual abuse survivors previously barred by the statute of limitations. The day that window opened, hundreds of suits were filed. California, which passed one of the first pieces of legislation years ago, added another revival window beginning this year.

One reason lawmakers have pushed such legislation is public safety: The legislation gives victims a greater opportunity to publicly name their abusers, who may still be a threat to their communities.

Kosnoff said bankruptcy will largely thwart that public safety effort.

“Individuals will come forward but their avenue will be to file proof of claim in the bankruptcy which is completely confidential,” said Kosnoff, who with Abused in Scouting has filed two recent suits against Boy Scouts.

In their statement, the Scouts flipped that, saying, a settlement fund "is the best means of compensating victims in a way that is equitable and protects their identities."

USA Today writers Cara Kelly, Nathan Bomey and Lindsay Schnell along with The Oklahoman's Josh Dulaney contributed to this report.