Important Notice About Boy Scouts Bankruptcy

October 28, 2020

On February 18, 2020, the Boy Scouts of America (“BSA”) and its affiliate, Delaware BSA, LLC, filed for Chapter 11 bankruptcy protection in a case titled In re Boy Scouts of America and Delaware BSA, LLC, case no. 20-10343, pending in the United States Bankruptcy Court for the District of Delaware.  BSA filed their bankruptcy case to address the significant liability it faces from sexual abuse claims asserted (or to be asserted in the future) by Scouts and former Scouts.

           
BSA, which has numerous affiliated Local Councils, ultimately operates through the organizations authorized to operate scouting units as “Chartered Organizations,” pursuant to Charter Agreements between the organization and a Local Council. Many churches in The United Methodist Church serve as Chartering Organizations. 
 
Churches often do not realize that they are responsible for much more than just giving a Troop some space to meet when they serve as a Chartering Organization. The “Annual Charter Agreement” each church signs suggests that the church is effectively responsible for conducting the Scouting program in its entirety, including the selection and screening of adult volunteers. As such, a local church that serves as a Chartering Organization could be liable for claims related to sexual abuse.
 
Many of the Churches in The Western North Carolina Conference currently serve or have served as a BSA Chartered Organization. It has only recently been made clear to our denomination that Chartering Organizations have potential standing in the BSA bankruptcy proceedings and should file a proof of claim to protect their interests before the proof of claim Bar Date (deadline).  Historically, BSA has indemnified, reimbursed, insured against, or otherwise covered any sexual abuse claims asserted by Scouts against Chartered Organizations.   However, the bankruptcy case may negatively affect the rights of a Chartered Organization to that sort of protection from BSA.
 
It is too early in the bankruptcy case to tell how the claims of Chartered Organizations will be addressed and what types of protections Chartered Organizations will be provided with respect to any abuse claims that may be asserted by Scouts in the future.  These important issues will likely be addressed through negotiations in the bankruptcy case among various constituents, including BSA, BSA Local Councils, insurance carriers, personal injury attorneys for sexually abused Scouts, a court-appointed future claimants’ representative, and Chartered Organizations.

The Bar Date, or final deadline, for filing proofs of claim in the BSA bankruptcy case is November 16, 2020.  
 
If your Church was at any time, or is currently, a Chartered Organization for the Boy Scouts, then your Church may potentially be named as a defendant in future litigation as the result of its operation of a Scouting unit.  Even though such litigation has not yet been, and may never be, filed, your Church has what is considered a “contingent and un-liquidated” claim against BSA for the as yet undetermined amount of damages that might be awarded in future,  Scouting-related abuse claims asserted against your Church.  
 
If your Church was at any time, or is currently, a Chartered Organization, a proof of claim should be filed in the bankruptcy case with the court-appointed claims agent in order to preserve the Church’s claim and protect the Church’s rights.  If your Church is or has been a Chartered Organization, your Church may lose valuable rights if it fails to timely file a proof of claim in the BSA bankruptcy case by the November 16, 2020 Bar Date for filing proofs of claims.

To facilitate the proof of claim filing process, our Conference has joined with other Annual Conferences in a coordinated effort to protect our Churches.  We have joined to retain the law firm of Bradley Arant Boult Cummings, LLP (“Bradley”) to file proofs of claim on behalf of any Church in our Conference that is or has been a Chartered Organization for the Boy Scouts.
 
To have Bradley file a contingent and un-liquidated proof of claim on your Church’s behalf in the BSA bankruptcy case regarding future Scout abuse claims, you must CLICK HERE to indicate that you authorize the Bradley firm to file a proof of claim on your church’s behalf and to provide ongoing representation of the church in the BSA bankruptcy proceedings.  
 
Even if your Church has not sponsored a troop, we need you to fill out the authorization so we will know your Church has seen this notice and responded accordingly.   A small number of Churches have received hardcopy or electronic notices from the bankruptcy court, and this has just come our attention.  But the vast majority of churches in our denomination have not received any sort of notices from the court.
 
Please consider this matter as requiring urgent action and respond before November 1, 2020.  
           
If you have any questions on this procedure, please contact Mark King (mking@wnccumc.org), Treasurer and Director of Administrative Services
 
 
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