That property has not sold. W. Todd Walter, the Scout executive for the Las Vegas council, told USA TODAY the Tort Claimants Committee “hired an independent, third-party land appraiser who just appraised that land at $12-to-14 million.”
Several of the Tennessee properties owned by Scout councils are listed in the state’s real estate assessment data with appraised values of $0. That includes 2,400 acres at Skymont Scout Reservation on the edge of the Cumberland Plateau, listed with a sale price of $0 in 1975, around the time the camp opened. Comparable property in the area is currently for sale at anywhere from $2,400 to $20,000 an acre, according to a USA TODAY analysis.
Styron said real estate valuations can be complicated for a number of reasons, including whether easements or mineral rights are attached or because of local and state ordinances.
Attorneys say, thus far, bankruptcy proceedings have done little to provide clarity. The claimants committee has been frustrated over responses to requests for financial documentation, particularly from local councils.
Boy Scouts’ assets are spread across a web of trusts and LLCs, which limits their availability to creditors and obfuscates the exact value of the organization.
“It’s a great planning tool,” Foohey said. “Bankruptcy or not, putting money and property in different corporate entities is a way to section off liability in a corporation or in a company whether it be nonprofit or for profit.”
Foohey also said the only entities obligated to contribute to the victims’ fund are the national organization that filed for bankruptcy and its insurers.
Local council assets present “a dilemma for the bankruptcy court“
Boy Scouts has insisted that the local councils are distinct and financially independent from the national organization and have argued they should be “protected parties” in the bankruptcy case.
The national organization describes its relationship with local councils as essentially a franchise arrangement: The national group handles the development of Scout content and structure, licensing, training, human resources, legal support and information technology; the local councils oversee troops and Cub Scout packs in a region and run day-to-day operations.
The bankruptcy judge has granted an injunction on all litigation against the councils. The Boy Scouts organization seeks to keep that injunction, and upon agreement of its proposed plan, to indemnify the councils “to the fullest extent lawful, from and against any and all claims, liabilities, losses, actions, suits, proceedings, third-party subpoenas, damages, costs and expenses (including full reimbursement of all fees and expenses of counsel), as incurred, related to, arising out of, or in connection with any Abuse Claim,“ according to Monday’s court filings.
The filings continued that after the proposed plan would take effect, any abuse claims against the councils “permanently and forever stayed.“
Victims’ attorneys are fighting against Boy Scout’s assertion that the councils are discreet entities, noting that they operate hand-in-glove with the national organization and the councils have significant liability for their part in allowing child abuse to continue unabated for decades. They’ve also accused Boy Scouts of using the division to shield assets from survivors since a majority of the organization’s wealth lies at the local rather than national level.
More: Tensions rise over local councils' role in Boy Scouts bankruptcy proceedings
Moreover, suspicions have been raised that local councils have deliberately hidden assets.
The Torts Claimants Committee accused the Middle Tennessee Council of transferring several camps into a trust last summer, breaking an agreement that they wouldn’t sell or transfer properties without notifying the creditors. The trust does not mention Scouts in its name or description, but the court ordered the addition of language stipulating that Boy Scouts may still have interest in the property.
Kosnoff said victims are being asked to sign off on a plan to vacate their rights to sue without a clear picture of the councils’ financial status.
“You’re asking victims to release not just BSA national but all these councils and you have no idea what the value is of the assets?” Kosnoff asked. “Is it $2 billion in assets? Is it $10 billion? $20 billion? Nobody can answer that question, which is going to be I think a dilemma for the bankruptcy court.”
Foohey said local councils may face significant liability if they don’t contribute to the fund, even though by law they may not have to. Hundreds of lawsuits against local councils in states across the country are currently in limbo as long as the injunction remains in place.
Boy Scouts is hoping to address those claims via the victims’ fund within the bankruptcy case. But the councils won’t be released from liability if they don’t contribute enough to the fund to get approval from survivors. At that point, the state cases will resume and Kosnoff said potentially thousands more will be filed.
Contributing Charter organizations, which sponsor local troops, are similarly seeking indemnity from the sex abuse cases. In the plan, their proposed contribution was not specified, with Boy Scouts saying it would be supplemented later.
What assets are available to pay victims?
Further complicating the road to finalizing a deal is how much of Boy Scouts of America money is legally available to compensate victims.
In January, the Torts Claimant Committee filed a complaint over the national organization’s assertion that $667 million of their $1 billion estate, more than 60%, is off limits to victims.
Nonprofit organizations are often bound by restrictions in how donations can be used, experts say. For example, if a donor gives money to a program for direct aide to veterans, “the charity is not allowed to use it on buying new software for their website,” Styron said.
The committee has argued that much of Boy Scouts’ restricted assets are, in practice, unrestricted, including three high adventure bases. Those camps – Philmont in New Mexico, Northern Tier in Minnesota and Florida Sea Base – have an asserted value of more than $60 million, according to court records.
The committee says they have been used to gain a line of credit from JP Morgan Chase, thus indicating they are not restricted. In court records, Boy Scouts said that line of credit, more than $62 million, is also restricted.
More than half of the assets Boy Scouts says are restricted relate to the Summit Bechtel Reserve in West Virginia, which amounts to $345 million.
Another wildcard in the total financial picture for survivors is the amount of contribution from Boy Scout’s insurers. Though they will be on the line to contribute based on the policies held by Boy Scouts, the amount has yet to be determined.
In recent weeks, insurers affiliated with insurers including Chubb and Hartford Financial Services Group, have questioned the validity of claims filed by law firms representing survivors arguing that they were poorly vetted and lack sufficient information.
In court documents, the insurers also requested permission to question survivors as well as any attorneys who signed claim forms for them. Those forms typically must be signed by claimants but, as the deadline approached, attorneys signed hundreds on behalf of their clients.
Robbie Pierce, who said he was abused by a Boy Scout camp employee when he was 13, welcomes oversight of the claims, saying that, if anything, the number is still low. He said he spoke with other members of his troop who chose not to come forward even though they were abused by the same camp employee.
“We’re not opportunistic. We’re a bunch of Boy Scouts,” Pierce said. “That used to be the word for honest and helpful people.”
What's next in the bankruptcy case?
Attorneys for survivors in the case say they will file a response to the plan with their own proposals, while the claimant’s committee will raise its own objection. Gayle said the committee is focused on making sure all survivors are taken care of.
“The strategy here is to have everyone recognized for what they suffered, first of all, and to have that respected, and to get as much help to them as we can,” Gayle said. “There isn’t a single man who suffered this abuse that does not have issues that need to be addressed.”
“We have guys in all kinds of situations and, frankly, we have men who already committed suicide and haven’t been able to get through their suffering.”
If an agreement can’t be reached, or Boy Scouts can no longer turn a profit, the court may turn to liquidation, Foohey said. That might not be a bad outcome for some survivors, she said, referencing the bankruptcy of the Weinstein Company after its founder, Harvey Weinstein, was accused of sexual harassment and assault over decades.
“Seeing the Weinstein Company taken apart publicly might have been a satisfying outcome,” Foohey said.
Another result may be similar to the case with Bikram Yoga. The brand of hot yoga filed for bankruptcy protection in recent years as a result of sexual misconduct allegations against its founder. Its studios rebranded as Bode Yoga, which Foohey said is another option for Boy Scouts, with the local councils rolling over into a rebranded entity.
Kosnoff, who has grown more fatalistic about the potential outcome, says a quick liquidation may result in a better deal for survivors because Boy Scouts will stop hemorrhaging money for attorneys’ fees, which eats into the pot for potential victims.
Some survivors, however, are upset by the idea of an end to Boy Scouts, and hope the nonprofit survives.
Michael Lipari, abused at 14 by a Scout leader whom he helped convict of child abuse, said he wants to see the organization acknowledge its mistakes and do everything in its power to make the organization safe.
“They should take some of the survivors and say, 'We’re going to have you on a board of advisors on how we can better ourselves and be an organization that can protect children. What are some of your recommendations?’ ” Lipari said.
“But the first step is they need to own it. Truly own every aspect of it. It’s a lot bigger than just putting money into a pot.”
Pierce said that when he first filed a claim, he wanted to find a way for Boy Scouts to continue to exist while helping those it harmed.
“Once I saw the numbers, and that there were literally thousands of us, I thought this organization has done so much more damage to young men than it has ever done good in this world. And they have always prioritized keeping themselves afloat over the safety of the young men,” Pierce said. "The fact that they’re now trying to find a way to continue to exist and pay us the least that they can, it’s not a surprise. That is their playbook.”
“There are too many of us for this ever to be fair, to ever get back a fraction of what we’ve lost.”
Cara Kelly is a reporter on the USA TODAY investigations team, focusing primarily on pop culture, consumer news and sexual violence. Contact her at carakelly@usatoday.com, @carareports or CaraKelly on WhatsApp.
Contributing: Mariah Timms of The Tennessean, Rachel Axon
