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Boy Scouts face bankruptcy in light of sex abuse allegations

The U.S. Catholic Church has faced billions of dollars in lawsuits in the last 30 years. This has led to bankruptcy, the selling of property, the dismissal of staff and a decline in church attendance. Now in the last 10 years the Boy Scouts of America (BSA) are facing allegations from former boy scouts who say the organization did not do enough to protect them and also covered up allegations of sexual assault by volunteers.

Look back law increases number of cases

The legal challenges for the BSA on this issue are many, notably including lengthy time limits for sexual assault with some claimants now in their 30s and 40s. Georgia and some other states created so-called "look back windows" as part of the Hidden Predator Act on older cases because the victims did not realize the implications of the original act or were unwilling to come forward before earlier deadlines.

Chapter 11 protection an option

The head of the BSA recently admitting that the organization is contemplating Chapter 11 bankruptcy protection. The object is to keep the Scouts going, but they are facing hundreds of claims and already paid tens of millions to protect the organization and address the issue.

Moreover, it may be the best option for the organization, which is also fighting insurance companies who dispute paying settlements because they believe these assaults were neither accidents nor unforeseen. The carriers also claim that the BSA did not do enough to warn parents.

Organizations need to be prepared

Any organization should be prepared to deal with allegations of sexual assault, particularly if their mission involves children in some way. Bankruptcy is certainly an option, but it is also recommended to confer with an attorney about other potential solutions to issues ranging from a single complaint to a large class action suit.

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