How much will Erie’s advice pay in settlement?




  • On July 1, Boy Scouts of America said it reached a proposed $ 850 million settlement to pay victims of abuse in the BSA bankruptcy case.
  • The agreement includes contributions from local BSA councils, such as the Erie-based French Creek Council
  • French Creek Council has not yet detailed what it could give; assets include Custaloga city camp

Since the 1960s, Northwestern Pennsylvania Scouts have camped, hiked, and held jamborees in the Custaloga Scout Preserve, on more than 500 acres in Mercer County.

The future of the camp, as well as the future of other Scout assets in the Erie region, should become clearer by the end of the month.

Clarity is required as part of the proposed $ 850 million settlement that the national organization of the Boy Scouts of America has reached with tens of thousands of child sex abuse victims who have filed claims in the case of bankruptcy of the organization.

The headquarters of the French Creek Council of the Boy Scouts of America are located on Robison Road in Summit Township.  The council coordinates Boy Scout activities in six counties in northwestern Pennsylvania.

The proposed offer, described as the largest sexual abuse complaint resolution in U.S. history, is supported by representatives of approximately 60,000 abuse survivors of what is expected to be approximately 82,500 eligible victims, according to the latest court records.

Massive offer:Scouts offer compensation for victims of sexual abuse in landmark $ 850 million settlement

Under the proposed $ 850 million deal, the national Boy Scouts organization is to contribute $ 250 million, with the remaining $ 600 million coming from the more than 250 local BSA councils, including the French Creek Council of the Erie region, which includes the town of Custaloga.

Council offices are on Robison Road in Summit Township, and the council coordinates the activities of approximately 3,000 Boy Scouts in six counties in northwestern Pennsylvania, based on 2020 figures. Bankruptcy records show 91 abuse complaints involving the French Creek Council, up from 87, based on a March filing.

Previous figures:Bankruptcy cases: claims for abuse of Erie region scouts at 87; national dispute resolution plan

The latest bankruptcy filings on the settlement, announced on July 1, indicate that local councils will make contributions, but the filings do not specify what those contributions will be. The documents indicate that this information will be completed at a later stage and will indicate the “total contribution expected from each local council, including a specific breakdown between the cash contribution and the real estate contribution”.

The next hearing on the proposed deal in the BSA Chapter 11 bankruptcy reorganization case is scheduled for July 29 before Judge Laurie Selber Silverstein, Chief Justice of the U.S. Bankruptcy Court for the District of Delaware, based in Wilmington. Lawyers involved in the case said they expected contributions from local councils to be itemized in court records by then.

The hearing was scheduled for July 20, until Silverstein pushes it back Wednesday to July 29 to give insurers more time to prepare their objections to the proposed settlement.

Assets and contributions

The entrance to the City of Custaloga Scout Preserve in Carlton, Mercer County.  The camp serves Boy Scouts in six counties in northwestern Pennsylvania.

The executive director of the French Creek Council, Duane Havard, was absent last week and could not be reached on whether the local council has decided on his contributions.

One of the attorneys representing victims of abuse in the national bankruptcy case, Paul Mones of Los Angeles, told the Erie Times-News that “there will be a formula,” created by the National BSA , to help boards determine their contributions to what’s called the $ 850 million Settlement Trust.

The national BSA, in a statement to the Erie Times-News, said that “local councils are carefully considering how they can meaningfully contribute to the Compensation Trust while ensuring that Scouting can continue to serve young people, families and communities for generations to come ”.

Go to court :Did the Boy Scouts violate their own code of honor by filing for Chapter 11 bankruptcy?

The BSA in the statement also said that local councils “are legally separate and distinct from the national organization. Local camps, properties and local donations are controlled by local councils. They all have a voice in the matter. of Chapter 11 of the national organization and share the BSA’s commitment to fairly compensate survivors of past abuse. “

The national BSA filed for bankruptcy in February 2020, citing a flood of nationwide abuse lawsuits.

Value of the city of Custaloga

Whatever the French Creek Council’s decision, its contributions could be cash, property, or a combination of the two. The total local council contributions of $ 600 million will include at least $ 300 million in cash and unearmarked properties with a combined estimated value of $ 200 million, according to the BSA’s petition in support of the settlement, filed July 1. The remainder of the $ 600 million will come in the form of a $ 100 million bond note that local councils will fund, according to the motion.

French Creek Council’s assets total $ 5,364,589, with net assets of $ 5,116,861 as of February 28, according to a balance sheet filed in the bankruptcy case on July 2. Net assets represent the board’s holdings after recording $ 110,448 in debt and $ 137,280 in other liabilities.

The municipality’s total assets, according to the balance sheet, include:

  • $ 131,538 in cash and equivalents
  • $ 833,259 in land, buildings and equipment
  • $ 2,215,183 in long-term assets
  • $ 2,184,608 in other assets

The projected value of the City of Custaloga Boy Scouts reservation is detailed in another document, a Property Value Sheet filed in bankruptcy court on July 2 and dated June 3. She classifies the fair market value of the property as follows:

  • $ 906,604 for the City of Custaloga Scout Main Reservation. It is listed as an unrestricted asset.
  • $ 160,000 for the Moss Woods area from the City of Custaloga Boy Scout Reservation. The Moss Woods section is listed as restricted.
  • An unrestricted property is one for which no restriction has been asserted or confirmed, according to the scorecard.
  • Restricted property has legal restrictions, “including donor restrictions on the sale of the property and / or requiring the return of the property or product to an unrelated party,” according to the valuation sheet.

Local effects:Area Scout leader plans no changes in Erie due to bankruptcy case

The City of Custaloga Scout Preserve is located in Carlton, Mercer County, near French Creek, on a site where the Mercer, Crawford, and Venango County boundaries meet. Court records indicate that the camp is located in Mercer County, with the exception of the Moss Woods section, which is listed as located in Vernon Township, Crawford County.

The Mercer County Council of the Boy Scouts of America purchased the land from the Town of Custaloga, consisting of over 500 acres, in 1963, and the Town of Custaloga opened for Scout Campground in 1967, according to the story. from the French Creek Council website.

The town of Custaloga replaced Mercer County Council’s Kiondashawa Camp and later became the home camp for the entire French Creek Council, according to the online story post, which also states that the camp is named after Kustaloga, a Native American chief “from the Munsee or Wolf Clan of Delaware.”

Payments to victims

The combined $ 850 million from the national BSA and local councils would go towards paying survivors of abuse, although the plan is not designed to give every survivor the same amount of money.

Record case:Scout abuse complaints could become biggest case against a single national organization

Survivors who want to resolve their claims immediately can file an “expedited distribution” and get $ 3,500, according to the payment plan detailed on July 2 in what’s called a disclosure statement. This is a key document that BSA lawyers have filed and amended to detail the organization’s proposed end to the bankruptcy case.

For survivors of abuse who wish to pursue their claims further, the plan proposes the creation of a scaling system. The settlement fund trustee would use the scaling system to determine payment based on an assessment of each abuse claim, including the type and duration of abuse, among other factors,

The system would be similar to the setup used by independent administrators in the Catholic Diocese of Erie and other Roman Catholic dioceses statewide to assess claims made to the Diocese Compensation Funds for Child Abuse sexual.

Scout uniforms are displayed in the French Creek Council of the Boy Scouts of America retail store in Summit Township.

Waiting for a resolution

Before the scaling system and other payment structures can take effect, the proposed settlement must get final approval from abuse survivor representatives and insurance companies, among others. Judge Silverstein of the U.S. Bankruptcy Court in Delaware will hear objections to the proposed settlement at the July 29 hearing.

Not everyone agrees with the plan.

An attorney for victims in the case, Michael Plau of Seattle, questioned whether the offer was large enough. In March, USA TODAY estimated the Boy Scouts to be worth more than $ 3.7 billion, including the more than 250 local councils as well as various trusts and endowments.

“The Boy Scouts have revealed that their local councils have more than $ 1.8 billion in unrestricted net assets, but their latest plan and disclosure statement does not reveal how much each council is contributing to this bankruptcy,” Pfau told USA TODAY when the proposed settlement of $ 850 was announced. “Our clients are already calling us and asking us why this new proposal is acceptable when it seems that local councils have so much more to offer.”

The Boy Scouts of America argue that the settlement represents the organization’s best way out of Chapter 11 bankruptcy and achieve its “dual restructuring goals,” according to the disclosure statement. The BSA lists these objectives as “providing a fair, streamlined and certain process by which abuse survivors can obtain compensation for abuse and ensuring that the reorganized BSA has the capacity to continue its vital charitable mission.”

The disclosure statement also reads: “The BSA cares deeply about all survivors of child abuse. The BSA understands that no excuse can repair the damage caused by the abuse or take away the pain survivors have endured. The BSA is unwavering in its commitment to continually improve all of its policies to prevent abuse. “

Includes reporting by Jordan Mendoza, reporter for USA TODAY.

Contact Ed Palattella at epalattella@timesnews.com. Follow him on twitter @ETNpalattella.





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