Boy Scouts consider bankruptcy as membership plummets, cost of sex abuse lawsuits mount

The Cushman Watt Scout Center, headquarters of the Boy Scouts of America for the Los Angeles Area Council, is pictured in Los Angeles, California, in this Oct. 18, 2012, file photograph.
The Cushman Watt Scout Center, headquarters of the Boy Scouts of America for the Los Angeles Area Council, is pictured in Los Angeles, California, in this Oct. 18, 2012, file photograph. | (Photo: REUTERS/Fred Prouser/Files)

A month after being slapped with a federal trademark lawsuit by the Girl Scouts of the United States of America, the Boy Scouts of America is considering bankruptcy as membership plummets and legal costs from defending itself against lawsuits alleging sexual abuse of boys mount.

Sources told The Wall Street Journal on Wednesday that the BSA hired law firm Sidley Austin LLP for assistance with a possible Chapter 11 bankruptcy filing.

And reacting to “news reports that will speculate about the BSA’s financial position” Wednesday, the BSA confirmed in a statement that it was “working with experts to explore all options available to ensure that the local and national programming of the Boy Scouts of America continues uninterrupted.”

Chief Scout Executive Michael Surbaugh noted in the statement that while there were “no imminent actions or immediate decisions expected” the organization continues to examine the best way to manage a desire to carry out their mission while compensating victims of sexual abuse at the same time.

“We have a social and moral responsibility to fairly compensate victims who suffered abuse during their time in Scouting, and we also have an obligation to carry out our mission to serve youth, families and local communities through our programs,” Surbaugh said.

“Throughout our history we have taken proactive steps to help victims heal and prevent future abuse. I want to stress that at no time in our history have we knowingly allowed a sexual predator to work with youth, and we always seek to act swiftly when alerted to abuse allegations,” he added.

The BSA is one of the largest Scouting organizations in the U.S. as well as one of the largest youth organizations in the country with more than 2.4 million youth participants and nearly 1 million adult volunteers.

As the organization has shifted toward more inclusive membership policies such as lifting its ban on openly gay members in 2014, allowing openly gay adults to be scout leaders, then allowing trans-identified boys in 2017, they have courted controversy.

Earlier this year, just six days after the BSA said they would drop the word "boy" from the name of their older youth program to help make sure "all youth are welcome," including girls, the Church of Jesus Christ of Latter-day Saints announced they would cut all ties with the group at the end of 2019.

The Latter-day Saints cited a shift toward a more globally-focused youth leadership and development program as the reason for bringing to an end a 105-year relationship between the two organizations.

In their lawsuit against the BSA last month, the Girls Scouts alleged that the organization's gender-neutral rebranding campaign, pushing a plan to start admitting girls in 2019, was creating confusion and would "marginalize" the female organization and "erode its core brand identity."

In their announcement in May, the Boy Scouts explained that the name change was part of an overall recruitment campaign called "Scout Me In." It's the first Boy Scouts recruitment campaign to feature girls in the promotional materials.

"The Scout Me In campaign celebrates the BSA's expansion to serve families and welcome girls and boys into Scouting in communities across the country," the organization said at the time. "It reinforces that the mission and core values in the Scout Oath and Scout Law are welcoming, inclusive and foundational for both young men and women."

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