The Supreme Court on Thursday lifted a temporary hold on the Boy Scouts of America’s $2.46 billion bankruptcy settlement for victims of sex abuse within the organization.
Justice Samuel A. Alito Jr. last week temporarily paused the bankruptcy settlement, giving the court more time to fully consider the matter.
The move came after a group of sex abuse victims asked the justices this month to place the billion-dollar settlement on hold while they appeal, noting that the justices are considering a similar matter in a different dispute — the legality of third-party releases in the Purdue Pharma bankruptcy case.
In a brief order on Thursday, the high court noted that after Justice Alito referred the matter to the whole court, the justices declined to continue the halt on the settlement. The move lets the bankruptcy plan proceed while an appeal can be litigated.
The 144 victims asked the high court to prevent the Boy Scouts’ bankruptcy plan from being implemented in the U.S. Bankruptcy Court for the District of Delaware, saying the plan would preclude their lawsuits against other parties. They point to the Supreme Court weighing whether bankruptcy plans can authorize third-party releases without consent in the case involving Purdue Pharma and the family behind the opioid OxyContin.
“Abuse claimants strongly disagree with the district court’s conclusion that they will be fully compensated for their sexual abuse under the bankruptcy plan,” the victims’ lawyers said in the court filing submitted Feb. 9.
Lawyers for the Boy Scouts of America responded in their court filing, saying the court should not pause the deal because many parties have been relying on it — and that many sex abuse victims are waiting to be compensated.
“The organization has acknowledged that thousands of young people were sexually abused in Scouting — the vast majority (80%) before 1988. [Boy Scouts of America] cannot understate how deeply it regrets that abuse. It has spent more than four years and expended most of its financial resources to prosecute the bankruptcy case and compensate Scouting-abuse survivors,” the filing read.
More than 80,000 sex abuse victims have sued the Boy Scouts of America over alleged abuse they suffered years ago.
The bankruptcy settlement plan would let the Scouts keep operating during its reorganization.
Critics of the settlement say it would release other parties from future liability. They had argued that the plan should be put on hold while the justices decide whether Purdue Pharma’s bankruptcy plan can release the Sackler family from future lawsuits.
A decision in the Purdue Pharma case is expected to be issued by the end of June.