Northwest Montana News

Northwest Montana News

Tuesday, April 7, 2020

MARK FRENCH FOR CONGRESS: Montana attorneys say Scouts trying to hide local assets in main bankruptcy suit


By Press release submission | Feb 23, 2020

Mark French For Congress issued the following announcement on Feb.22.

hen Stephen Rutledge heard that the Boy Scouts of America had filed for bankruptcy protection, he felt betrayed.

“They’re covering their butts,” he said.

Rutledge, of Missoula, is one of thousands of men in the U.S. alleging they were sexually abused while Scouting. And, he’s far from alone in suspecting the BSA is trying to protect assets from going to compensate those who say they were sexually molested by Scout leaders.

On Tuesday, the BSA filed for Chapter 11 bankruptcy protection following an avalanche of lawsuits alleging sexual abuse.

The BSA has said it believes survivors and encourages them to come forward. The youth organization also says it is committed to compensating survivors of sexual abuse and has promised that part of the bankruptcy restructuring will set up a trust fund to compensate victims.

The BSA national organization is worth more than $1 billion, according to a recent New York Times report. But, the bulk of the BSA’s assets are owned and controlled by local councils.

And some of those locally owned assets, including large tracts of land, are very valuable. In Texas, for example, the 2,800-acre Philmont Scout Ranch bordering the Sam Houston National Forest is worth $65 million, the Times reported.

The Montana Council also owns its share of valuable assets, totaling as much as $25 million. Melita Island, a Scout camp on an island in Flathead Lake, is alone worth as much as $12 million, estimated Flathead-based Realtor Scott Hollinger.

In Billings, attorney Shane Colton has one active sex abuse claim filed against the BSA and the Montana Council. The November filing alleges two Hamilton men were abused in the mid-1950s in a Hamilton troop. Now, that filing will be held up in bankruptcy court.

“(Those claims) are just there for now,” Colton said.

Survivors like Rutledge worry that their local cases will stagnate as the national bankruptcy plods slowly through the courts. They also fear the BSA’s promised “Victim Compensation Trust” will be limited by whatever can be paid after the organization settles with its creditors. They also wonder what role local councils, with their valuable assets, will play in the trust.

The biggest challenge for lawyers with local cases is disentangling the complicated relationship between national and local councils, Colton said.

The BSA insists that local councils are legally and financially independent and separate from the national council and its liabilities.

Local councils were also quick to express their independence following Tuesday’s bankruptcy filing.

Dirk Smith, executive direction of the Montana Council, has declined to comment beyond an emailed statement.

“The Montana Council — which provides programming, financial, facility and administrative support to local units and individual Scouts in our area — is separate and distinct from the national organization,” he wrote.

The national BSA is also arguing that the assets of local councils be shielded from the abuse claims.

“What we’re seeing with the bankruptcy filing is that the Boy Scouts are asking that the bankruptcy protections apply to local councils,” Colton said.

That could halt future claims against local councils and may prevent the local councils from contributing to the financial restitution to survivors.

“That’s probably the next battle ground,” said Andrew Van Arsdale, a lawyer with Abused in Scouting, a national group of law firms working with about 2,000 men across the nation to bring claims against the BSA.

Local councils should be held accountable for compensating local abuse survivors, Colton argued. Local councils have been complicit in decades' worth of abuse cases, he said.

“They need to fess up and recognize that sadly the entire culture is what led to the victimization,” Colton said.

Van Arsdale also questioned the notion that the local councils are entirely separate.

“They’re just a subsidiary,” he said. “They’re just the local presence of what is the national brand.”

Many of those local councils are named in the more than 1,700 pending or asserted claims of abuse by the BSA, including Colton’s case which was filed against both the Montana and National BSA.

A 90-page plan published by the BSA outlines how the organization would like to be restructured, but some things may change as the court case progresses. Much will remain unclear until all survivors have come forward and the BSA has a complete list of its creditors.

Exactly how much the BSA will owe to survivors of abuse won’t likely be determined until a limit is set on claims, Van Arsdale said.

In order for the bankruptcy filing to move forward, a deadline for future sexual abuse lawsuits will need to be set. After that deadline, survivors will be barred from bringing future claims against the BSA.

That would even prohibit survivors in states that have expanded the statute of limitations for sexual abuse — including Montana — from coming forward past the bankruptcy deadline.

When exactly that limit on survivors will be set is also unclear, even though time is limited. The BSA has proposed an 80-day window.

“They need to move forward now, they have literally months,” Van Arsdale said.

Van Arsdale believes the bankruptcy petition is an inherent acknowledgement from the BSA of decades of abuse against children.

“Our opinion is that the BSA is pleading guilty in the court of opinion,” Van Arsdale said.

For Clayton "Kelly" Seale, a Colstrip resident who has alleged he was abused while Scouting, he thinks the BSA isn't off the hook even if he isn't compensated. He's still planning on filing a claim against the bankruptcy court, and wants to see the BSA held accountable.

"I just want to be included," Seale said.

Until BSA's future becomes clearer, Seale has felt liberated by coming forward, sharing his story and urging other ex-Boy Scouts to do the same.

Original source here.

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