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Irving-Based Boy Scouts Considering Bankruptcy Protection, WSJ Reports

A group of Boy Scouts check another scout's merit badges prior to a ceremony at the Los Angeles National Cemetery on Saturday, May 26, 2018.
Associated Press
Boy Scouts check a scout's merit badges prior to a ceremony at the Los Angeles National Cemetery in May 2018.

The Boy Scouts of America says it is exploring "all options" to address serious financial challenges, but is declining to confirm or deny a Wall Street Journal report that it may seek bankruptcy protection in the face of declining membership and sex-abuse litigation.

Chief Scout Executive Michael B. Surbaugh issued a statement on Wednesday, saying "I want to assure you that our daily mission will continue and that there are no imminent actions or immediate decisions expected."

Surbaugh was responding to the Journal's report that the BSA, founded in 1910, had hired Chicago-based law firm Sidley Austin to assist in a possible chapter 11 bankruptcy filing. He described the report as "news speculation," but he acknowledged that the group is "working with experts to explore all options available" as well as the pressures arising from multiple lawsuits related to past instances of sexual abuse.

This week's report comes as the Boy Scouts has also faced a drop in membership through the years — the group had 2.3 million members last year, down from its peak of 5 million in the 1970s, The New York Times has reported.

In the last several years, the Boy Scouts has faced numerous lawsuits alleging sex abuse going back decades and that the organization didn't do enough to keep pedophiles from becoming leaders. Filing for bankruptcy would give the Boy Scouts a chance to negotiate settlements with accusers by keeping civil proceedings against the organization from moving forward, the Journal reported. 

In 2012, theOregon Supreme Courtordered that files from the 1960s through the mid-'80s be released that detailed sex-abuse allegations within the Boy Scouts of America.

Last week, a New Mexico man filed a lawsuit alleging that two Catholic priests who were scout leaders sexually abused him for years, starting in the 1980s. Also last week, a scouting volunteer in Indiana was arrested on allegations he engaged in sex acts with a 15-year-old scout.

This past summer, a lawsuit was filed in Connecticut accusing the organization of not stopping a former scoutmaster from allegedly molesting boys in the 1970s.

Other institutions facing multifaceted sexual abuse scandals have sought bankruptcy protection recently. USA Gymnastics took the step last week as it attempts to settle dozens of lawsuits related to abuse by now-imprisoned gymnastics doctor Larry Nassar. About 20 Roman Catholic dioceses and other religious orders around the U.S. have previously filed for bankruptcy protection as a result of clergy sexual abuse claims.

Last week, a Roman Catholic Jesuit investigation found credible allegations of sexual abuse dating back to 1955, and Jesuit College Preparatory School of Dallas said the list includes names of 11 men who once worked at the school.

In the statement, Surbaugh apologized on behalf of the BSA to those abused during their time in the Boy Scouts.

"We sincerely apologize to anyone who was harmed during their time in our programs," Surbaugh wrote. "We believe in fairly compensating [victims] and we have paid for unlimited counseling, by a provider of their choice, regardless of the amount of time that has passed since an instance of abuse."

In addition to sex abuse allegations, a number of changes have taken place in the organization in recent years: