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Insurers Ask Judge in Boy Scouts Bankruptcy Case to Take a Closer Look at Potentially Fraudulent Claims

Insurers have asked the judge in the bankruptcy case against the Boy Scouts of America to further investigate what they say are tens of thousands of fraudulent claims among the real cases of sexual abuse filed against the organization before sending out a settlement agreement to claimants for a vote.

Boy Scout insurer Century Indemnity is asking U.S. Bankruptcy Judge Laurie Selber Silverstein to determine how many of the tens of thousands of sexual abuse claims that have been filed against the BSA are legitimate, saying potentially fraudulent submissions among them could dilute the vote on whether to approve the Boy Scouts’ plan to emerge from bankruptcy.

Century Indemnity and The Hartford, which will be responsible for most of the monetary payout in the bankruptcy case, said some groups of lawyers that are representing plaintiffs submitted thousands of claims that are questionable, Legal Newsline reported.

The victims’ groups under scrutiny include Abused in Scouting and The Coalition. The insurers said thousands of claims submitted by the groups were robo-signed, and that most of the claims received little scrutiny at best.

Coalition founder Timothy Kosnoff acknowledged last month that his signature was electronically added to dozens of claims without his knowledge or permission, per Legal Newsline.

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Earlier this month, Judge Silverstein ordered an investigation into an advertising campaign used to recruit abuse claims against the Boy Scouts and the methods used to vet potential claimants.

The Boy Scouts sought bankruptcy protection in February 2020 to halt individual lawsuits and create a compensation fund for thousands of men who said they were molested as youngsters.

In July, the BSA proposed an $850 million deal that would bar further lawsuits against it and its local councils. The deal did not cover the more than 40,000 organizations that have charters with the BSA to sponsor scout units, including many churches.

The official committee representing abuse victims has advised them to vote against the reorganization plan, saying it promises too little as far as settlements, The Wall Street Journal reported. However, the law firms representing the majority of victims, more than 60,000 of the roughly 82,000, encourage them to vote in favor of the plan.

The Hartford earlier agreed to pay $787 million into a fund for sexual abuse claimants. The Boy Scouts also reached an agreement with the Mormon church, a major supporter, to contribute $250 million to the abuse fund.

That brought the total amount of contributions to the settlement fund to more than $1.8 billion, per The Wall Street Journal.

In an amended disclosure statement filed Sept. 29, the Boy Scouts organization said that if it were able to emerge from bankruptcy in December 2021, its estimated monetary contribution to the settlement fund would be approximately $58.9 million, whereas if it were delayed to March 31, 2022, it could drop to approximately $26 million due to circumstances, including factors affecting its business dealings and additional legal fees.

Anne Stych

Anne Stych is a writer in Charlotte, North Carolina.