The Summit Bechtel National Scout Reserve and a West Virginia-chartered nonprofit group created to expedite its development figure prominently in a bankruptcy reorganization plan the Boy Scouts of America filed last week.
The 379-page Chapter 11 plan, filed in U.S. Bankruptcy Court for the District of Delaware, establishes a trust fund to settle thousands of sexual abuse claims by former Boy Scouts. The Boy Scouts of America filed for bankruptcy in February 2020, following a deluge of sexual abuse suits by former members.
The Boy Scouts propose initially committing about $220 million to the trust and encouraging the organization’s 250 affiliated local councils, such as the Charleston-based Buckskin Council, to voluntarily contribute at least $300 million more.
The reorganization proposal also calls for the Boy Scouts to add $25 million in cash to the fund within two years of its effective date, in addition to proceeds from the sale of several Texas and North Carolina real estate properties and oil and gas properties in 17 states. An art collection that includes 60 original Norman Rockwell paintings also would be liquidated, with sale receipts added to the pool.
The Boy Scouts maintain the organization needs at least $75 million to continue operating, as it intends to do, after emerging from bankruptcy, according to Monday’s filing. The organization pledged to add any unrestricted assets on hand above that amount to the victims’ trust fund.
Lawyers representing abuse victims’ interests in the bankruptcy said the Boy Scouts proposal would provide qualified abuse claimants settlements of only about $6,000 each. In a statement that followed Monday’s filing, claimants’ attorney Paul Mones described the Boy Scouts plan as “woefully and tragically inadequate.”
The Scouts, in a statement released after the filing, maintain the reorganization plan “demonstrates that considerable progress has been made as we continue to work with all parties toward achieving our strategy to provide equitable compensation for victims.”
The statement went on to say the plan would allow the Boy Scouts to meet other financial obligations “so that we can continue to serve youth for years to come.”
The Boy Scouts maintain that $667 million of the organization’s $1 billion estate consists of “restricted” assets that are not available for distribution to abuse victims. Nonprofit groups often receive funding from donors who stipulate their gifts be used for particular programs or purchases, making such funds restricted from general use.
Among holdings deemed restricted by the Boy Scouts are the group’s High Adventure base camps. Those include Philmont in New Mexico, Northern Tier in Minnesota and Sea Base in Florida, valued at a combined total of more than $60 million.
Two West Virginia entities account for more than half of the Boy Scouts’ restricted assets.
The 10,600-acre Summit Bechtel Reserve in the New River Gorge, which doubles as the site for the National Scout Jamborees, is Scouting’s newest High Adventure base camp, making it, too, a restricted asset, according to the Boy Scouts. Also deemed ineligible for addition to the trust fund is a $350 million note receivable from Arrow WV Inc., a nonprofit group established by the Boy Scouts to support Summit Bechtel’s creation.
Arrow WV Inc., in fact, owns the Summit Bechtel Reserve and leases it to the Boy Scouts, according to bankruptcy filings. It was incorporated in Fayette County in June 2009, according to the West Virginia Secretary of State’s office. Texas equity investor Jack D. Furst, who led the Boy Scouts task force chosen to identify a permanent National Jamboree site, is listed as president; current Scouts President and CEO Roger Mosby, vice president; and Charleston attorney and current Scouts general counsel Steve McGowan, secretary.
Arrow WV oversaw development of Summit Bechtel, using money raised through the sale of revenue bonds issued by the Fayette County Commission for that purpose. It continues to support the Boy Scouts “by developing land and related facilities for use by the Boy Scouts of America in carrying out its activities and operations,” according to its most recent public Form 990 tax filing.
While the Boy Scouts regard Summit Bechtel and other High Adventure base camps, as well as Arrow WV’s holdings, as exempt from addition to the trust fund settlement pool, the court-recognized tort claimants committee, which represents abuse victims, and attorneys for claimants do not.
They argue there are neither specific deed nor donor restrictions to prevent the sale of the High Adventure camps or protect the note held by Arrow WV. They also dispute the Boy Scouts’ contention the 250 local councils, which handle the day-to-day administration of Scouting activities at county and regional levels, are separate entities whose assets should not be tapped for inclusion in the settlement trust fund.
Assets held by local councils are believed to be worth several times those owned by the national organization.
In the court filing, the Boy Scouts said the organization would report to the bankruptcy court by June 1 the total amount of assets local councils are willing to commit to the fund. The national organization, according to the filing, is “committed to ensuring that the aggregate value of the local councils contributions is not less than $300 million.”