The Boy Scouts of America (BSA) has filed for bankruptcy protection in a move that the group says will allow it to build a compensation fund for sex abuse victims.
The move follows a number of lawsuits filed against the organisation over claims of sexual abuse, alleging it failed to prevent hundreds of cases.
As a result of the move, all civil lawsuits against it are put on hold.
The group is struggling with declining membership as well as abuse claims.
“The BSA cares deeply about all victims of abuse and sincerely apologises to anyone who was harmed during their time in scouting. We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” chief executive Roger Mosby said in a statement.
Court papers filed in Delaware listed liabilities of up to $1bn (£768m) and assets of as much as $10bn, reports say.
One of the largest non-profit youth organisations in the US, the BSA was founded 110 years ago
The filing was made under Chapter 11 of the US bankruptcy code which allows the group to keep operating and pay its creditors over time.
The bankruptcy allows the organisation to bring all of the lawsuits into one court and try to negotiate a settlement, rather than using its funds to fight each case in court.
The group said it was setting up a trust fund to compensate victims.
“While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process – with the proposed trust structure – will provide equitable compensation to all victims while maintaining the BSA’s important mission,” Mr Mosby said in a statement.
The BSA has 261 councils which operate local troops and own assets including land in many states, the Wall Street Journal (WSJ) reports. Tuesday’s bankruptcy move is designed to protect those councils, which hold about 70% of all BSA assets, according to the WSJ.
In its statement, the BSA said the councils, which are legally separate and financially independent of the national organisation, had not filed for bankruptcy.
Boy Scouts of America
- One of the largest non-profit youth organisations in the US
- Founded in 1910
- Nearly 2.2 million members between the ages of seven and 21
- Nearly one million volunteers in local councils throughout the US
- Former presidents of the organisation include ex-Secretary of State Rex Tillerson and former Secretary of Defence Robert Gates
Ex-Secretary of State Rex Tillerson is a former president of the BSA
Other non-profit organisations facing multiple sexual abuse claims, including the Catholic Church and USA Gymnastics, have also sought bankruptcy protection in recent years in the face of sexual abuse lawsuits.
The BSA is facing hundreds of claims over sex abuse in several states.
Last year, the Abused in Scouting group began advertising around the country and has since found nearly 2,000 people with complaints, including one in every state, the New York Times reports.
