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Bankruptcy Law Blog

Thursday, January 17, 2019

Boy Scouts of America May File For Bankruptcy

The Boy Scouts of America organization is making some big changes. The 108-year-old organization is dealing with declining membership numbers and allegations of sexual abuse. The organization is under so much pressure it is reportedly considering filing for bankruptcy

The BSA is facing lawsuits from numerous former scouts who claim they were sexually abused by scout leaders, at BSA events, or on BSA property. This is a sad turn of events for an organization that has such a storied history, but it is frustrating that these allegations of abuse are just now coming to light. 

On top of this, the BSA is opening its ranks to girls who want to be scouts as well as gay scouts and leaders. These changes are supposed to help stop BSA’s numbers from declining in the long run, but in the short term it has made a lot of people angry. The Church of Jesus Christ of Latter-day Saints (the Mormons) is advising its members to leave BSA, and the Girl Scouts of the U.S.A. are suing for trademark infringement.

We will not be surprised if the national BSA organization files for bankruptcy in order to speed the resolution of the lawsuits that have been filed against it. It is common for organizations facing lots of legal uncertainty to declare bankruptcy to force a settlement. Bankruptcy gives troubled organizations a chance to halt discovery, pull together available assets, and set a timeline for potential plaintiffs to make claims against it. It eliminates the unknowns that come with litigation, and allows the organization to plan for the future. USA Gymnastics has filed for bankruptcy in the face of all the lawsuits over team doctor Larry Nassar’s sexual misconduct, as have numerous churches.  

If BSA does file for bankruptcy, local scouting groups may not even notice. “The Scouting program in North and Central Alabama will not be impacted as we are financially removed from the operation of the National BSA,” says J.T. Dabbs, III, CEO, Greater Alabama Council, Boy Scouts of America.

It is not just large organizations or companies that can take advantage of the bankruptcy rules that halt other lawsuits while a bankruptcy case is pending. If you are being evicted or foreclosed on, one way to halt those actions and hold on to your home is filing for bankruptcy. 

It must also be noted that bankruptcy stops cases you might want to proceed as well. For example, divorce cases are put on hold when a bankruptcy is filed, which could significantly delay you and your partner’s split. 

If you have questions about how filing for bankruptcy will impact your life, please do not hesitate to reach out and schedule and appointment with one of our attorneys. We have years of experience in the bankruptcy world that we are eager to put to work for you.  

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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”