Will Boy Scout bankruptcy sweep abuse cases under the rug?

By Lewis Kamb / The Seattle Times

It happened multiple times between the ages of 11 and 15, says A.N., a Snohomish County man known only by his initials in a lawsuit.

He was a Boy Scout then, in Troop 8 out of Everett. During summers from 1977 to 1981 he worked at the Fire Mountain Scout Camp near Mount Vernon, where A.N.’s lawsuit says he encountered a sexual predator named Charles Grewe.

The scouting leader molested the boy “numerous times,” the lawsuit states, and as a result, A.N. lived “in constant fear and anxiety that Grewe would sexually abuse him and that other Scouts would find out about the abuse.”

In his decades since scouting, A.N. says he’s experienced severe emotional trauma, including “shame, humiliation and loss of enjoyment of life.” Only last year did he start “to take the steps to understand the nature and extent of the injuries he has suffered as a result of the abuse,” his suit says.

But exactly how A.N. — and hundreds of other men like him in Washington and across the nation — will be able to seek justice against the Boy Scouts of America (BSA) is uncertain. Facing scores of lawsuits, the Boy Scouts of America’s national council filed for bankruptcy this week to limit and protect its potential financial liability stemming from decades-old sexual abuse claims.

The Irving, Texas-based scouting group, a nonprofit corporation that serves as the national umbrella organization under which some 275 local scouting councils operate, said in a statement Tuesday its bankruptcy case aims to create a Victims Compensation Trust to “provide equitable compensation to victims.” At the same time, the Chapter 11 filing seeks to help the BSA survive “to continue carrying out its mission for years to come,” the organization announced.

“Tragically, there have been times when individuals took advantage of the BSA’s programs to harm children,” the Boy Scouts said in a statement posted to the group’s website Tuesday. “The BSA firmly believes that a proposed Victims Compensation Trust structure is the best means of compensating victims in a way that is equitable and protects their identities. The BSA encourages victims to come forward to file a claim as the bankruptcy process moves forward and will provide clear and comprehensive notices about how to do so.”

But two Seattle trial lawyers who are nationally renowned for their handling of Boy Scouts abuse cases say the bankruptcy filing will complicate ongoing lawsuits brought by abuse survivors and will attempt to limit future claims from others. A motion included in the Boy Scouts’ federal bankruptcy case, filed in Delaware, proposes an 80-day “bar date,” or deadline, for any further claims to be filed against the BSA.

“What they’re proposing is absurd,” said Seattle lawyer Tim Kosnoff, whose Abused in Scouting group represents about 2,000 clients, including more than 100 in Washington state. “We’ll never agree to it, and I doubt a court will, either. But if you’re a victim of scouting abuse, the time is now to come forward.”

Attorney Michael Pfau, whose Seattle firm represents A.N. among his three active lawsuits in Washington, and about 300 other clients nationwide, noted that ongoing suits against the national BSA automatically will be stayed, or halted, while the bankruptcy is litigated.

“For many of my clients, compensation is not the primary concern,” Pfau said. “They want transparency. Their fear is that with this bankruptcy, everything is going to be swept under the rug. So the question now really is, are the Boy Scouts going to be held accountable?”

Ripple effect

A trend of recent changes to state laws to eliminate, extend or otherwise ease legal deadlines for childhood sexual abuse survivors to take legal action precipitated the Boy Scouts bankruptcy. Recent statute-of-limitations changes for sex abuse cases in California, New York, New Jersey and elsewhere have opened the floodgates to hundreds of potential lawsuits.

“The Boy Scouts have spent millions of dollars lobbying state legislatures to try to stop these changes,” Kosnoff said. “But they’ve failed, and now see the handwriting on the wall.”

In its statements about the Chapter 11 filing, the Boy Scouts signaled the bankruptcy will seek to separate the national group from its local scouting affliates.

“Local councils are legally independent, separate and distinct from the national organization,” the BSA contends on a new website, www.bsarestructuring.org, dedicated to information about the bankruptcy case. The local councils are not part of the bankruptcy, nor are local assets “directly affected … because the local councils are not filing entities,” the website says.

Michael S. Quirk, executive of the Chief Seattle Council, Washington’s largest council, did not immediately respond Tuesday to a request for comment about the case.

Lawyers for abuse victims contend such delineation is complicated by ongoing financial relationships and shared assets, as well as documented, collective failures shared by both the national and local councils in many of the abuse cases.

A likely issue of contention will be how national BSA will seek to protect local councils and their sponsoring organizations, such as the Catholic or Mormon churches, Pfau said.

“This creates a huge ripple effect that I suspect will be a very, very big issue,” he said. “Does BSA drag the local councils into bankruptcies with it, and will they implicate their sponsors? It could get very messy very quickly.”

Battles over transparency also are likely to come into play.

For more than 100 years, the BSA has kept so-called “perversion files” — internal records that tracked and, in theory, aimed to weed out suspected pedophiles within Scouting ranks. In recent years, an expert hired to review the files for the BSA identified 7,819 perpetrators suspected or implicated in the abuse of more than 12,000 scouts nationwide, though some experts believe the number is likely larger.

Also known as the “ineligible volunteer,” or IV files, a portion was disclosed in 2012 under an Oregon Supreme Court ruling, revealing scores of names of suspected pedophiles that spurred lawsuits nationwide. Among them were at least 38 scouting officials in Washington state, several of whom the BSA knew posed a danger to kids, but allowed to remain in scouting.

That includes Grewe, whose IV file begins in 1987 with news clippings and correspondence between the local Evergreen Area Council and national BSA. Grewe’s records center on a criminal case brought against him after he left Scouting, while working as a school-bus driver.

But public records show multiple boys from Lake Stevens complained to the Snohomish County Sheriff’s Department and the local council that Grewe had molested them in 1981, while he was an assistant Scoutmaster. Nonetheless, Grewe continued in scouting and was given a full-time position as Fire Mountain’s aquatics director.

Grewe, who was convicted of child rape and indecent liberties in 1989 and is now a registered sex offender living in Lake Stevens, did not return a phone call Tuesday.

“This is just one example of a guy who fell through the cracks that implicates both the local and national councils,” Pfau said. “But what about all the other files the Boy Scouts have kept secret for the past century? My clients and other abuse survivors don’t want this bankruptcy to sweep that all away.”