Boy Scouts’ bankruptcy judge approves nearly $250 million in fees – Reuters

The statue of a scout stands in the entrance to Boy Scouts of America headquarters in Irving, Texas, February 5, 2013. REUTERS/Tim Sharp Acquire Licensing Rights

Oct 18 (Reuters) - The Boy Scouts of America has received a U.S. bankruptcy judge's approval to pay about $245 million in fees to lawyers and financial advisers who crafted the youth organization's $2.46 billion settlement of sex abuse claims.

U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, late on Tuesday mostly approved final fee applications from more than two dozen law firms and advisers who worked on the bankruptcy case. The overall bankruptcy fees could end up closer to $275 million, based on outstanding requests for payment from other groups that participated in the bankruptcy.

Silverstein had decried the "staggering" legal fees racked up in the case in 2021, when the number crossed the $100 million threshold.

White & Case, which served as lead counsel during the Boy Scouts' bankruptcy, received the highest fee award, at $71 million. Pachulski Stang Ziehl & Jones, which represented the official committee of abuse claimants, received $37.8 million, and Alvarez & Marsal, the Boy Scouts' financial adviser, received $19 million.

White & Case attorneys told Silverstein at an Oct. 5 hearing that they recognized the fees were high, but noted that the case was extraordinarily complex and ultimately led to a successful bankruptcy settlement that allowed the Boy Scouts to emerge from Chapter 11 in April.

White & Case attorney Jessica Lauria said at the Oct. 5 hearing that the Boy Scouts' overall fees compare favorably to amounts spent on other complex bankruptcies, pointing out that Johnson & Johnson spent more than $170 million on failed efforts to resolve talc-related lawsuits through a subsidiary's bankruptcy cases.

The fees approved Wednesday include payments for the Boy Scouts' court-appointed committees representing sex abuse claimants and other creditors, and a future claims representative that advocated for abuse victims who had not yet stepped forward when the case was filed in February 2020.

The judge deferred ruling on an additional $5 million in fees requested by those parties, which have been challenged as unreasonable by the U.S. Department of Justice's bankruptcy watchdog.

Silverstein is still considering separate requests for payment from other groups that helped negotiate the Boy Scouts' bankruptcy settlement, including a $21 million request from the Coalition of Abused Scouts for Justice, the largest group of abuse claimants in the case, a $3.5 million request from two firms that advocated for plaintiffs with higher-value abuse claims, and a $1.5 million request from a group of Catholic organizations that sponsored Scouting programs.

Debtors do not normally cover the legal costs of outside groups, other than those that are officially appointed by the court. But the abuse claimants and Catholic group have sought reimbursement for their "substantial contribution" to the success of the Boy Scouts' bankruptcy settlement.

The Boy Scouts exited bankruptcy in April after finalizing a settlement that resolved the claims of more than 80,000 men who say they were abused as children by troop leaders.

Read more:

US Boy Scouts exits Chapter 11 bankruptcy after abuse settlement

Boy Scouts victims begin receiving settlement payouts as appeals continue

Boy Scouts bankruptcy judge bemoans 'staggering' legal fees

Reporting by Dietrich Knauth

Our Standards: The Thomson Reuters Trust Principles.

See original here:

Boy Scouts' bankruptcy judge approves nearly $250 million in fees - Reuters