Boy Scouts bankruptcy plan headed to federal appeals court

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The insurers argue the case presents “fundamental questions of bankruptcy law of vital importance that could have widespread impact in mass tort bankruptcies for years to come.”

In an emergency motion filed Friday, attorneys for non-settling insurers asked U.S. District Court Judge Richard Andrews to halt the effect of a ruling he issued Tuesday while they take their case to the Third U.S. Circuit Court of Appeals.

The opposing insurers note that an automatic halt to litigation against the Boy Scouts as a debtor in bankruptcy expires after April 11. They fear the BSA could argue at that point that further appeals are moot, thus subjecting them to irreparable harm. They also note BSA lawyers on Thursday refused to agree even to a period of advance notice before causing the bankruptcy plan to to take effect.

“It’s time for the objecting insurers to show that they actually care about the people they insure, and stand aside while this plan becomes effective,” Kennedy said in a text. Settling insurers, local Boy Scout councils and troop sponsoring organizations would receive broad liability releases as non-debtor “third parties” protecting them from future sex abuse lawsuits in exchange for contributing to the victims’ compensation fund — or even for not objecting to the plan.

 

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