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June 24, 2021

WSJ: Boy Scouts could back out of $650M settlement with The Hartford

Photo | CoStar The Hartford's Asylum Hill headquarters in Hartford.
By Zachary Vasile

The Boy Scouts of America has signaled that it could scrap a $650 million settlement with property and casualty insurer The Hartford over sex abuse claims if victims groups keep up their opposition to the deal, which they have called inadequate.

According to a report from The Wall Street Journal, the Boy Scouts organization on Friday filed documents with the U.S. Bankruptcy Court in Wilmington, Delaware, saying it would seek the counsel of the judge presiding over its bankruptcy proceedings if it cannot get enough abuse victims to sign off on the proposal — a stipulation built into the pact when it was announced two months ago. If no compromise can be reached, the BSA said, it will explore backing out of its deal with The Hartford.

A spokesperson for The Hartford told The Wall Street Journal that if the $650 million settlement isn’t approved by the bankruptcy court, the company is prepared to “vigorously defend” its position in related coverage litigation.

The Boy Scouts, reeling from hundreds of lawsuits alleging the organization’s negligence failed to stop widespread sexual abuse by Scout leaders, sued The Hartford in 2018 in an attempt to recover money for legal fees and settlements in connection with insurance policies it holds. The Hartford had argued that its policies, issued to the BSA in the 1970s, did not cover those claims.

In April, the two sides reached an agreement for payment expected to “fully release The Hartford from any obligations under policies it issued to the BSA and its local councils,” the insurer said at the time.

The Boy Scouts of America filed for Chapter 11 bankruptcy protection in February 2020 and since then has been working to establish a victims compensation fund. It will include money from local councils and the national organization, together with payments from insurance companies.
 

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