Abuse victim can seek $120M from Boy Scouts’ insurers

A federal bankruptcy judge in Delaware ruled Monday a sexual abuse victim can proceed with his suit seeking $120 million from three insurers for the Boy Scouts of America, finding he was not provided with adequate notice of an injunction barring suits against certain insurers.

The judge said in In re: Boy Scouts of America and Delaware BSA LLC that while the victim had knowledge of the Boy Scouts of America’s bankruptcy petition filing, he was not provided with actual notice of a confirmation hearing or the entry of an insurance entity injunction.

The injunction, first filed in September 2022, barred suits against insurers such as Liberty Mutual Holding Co. Inc., Travelers Cos. Inc. and Gulf Insurance Co., that did not reach settlements with the Boy Scouts of America, court records show.

The ruling states that the victim’s knowledge of the bankruptcy case “does not satisfy the requirements of constitutional due process,” and, therefore, he is not bound by the injunction.

The victim initially sued the Boy Scouts of America, Heart of America Council, and his abuser, Joseph Mackey, in Missouri state court in January 2016. Mr. Mackey was the victim’s scoutmaster and the medical director of HOAC.

The victim settled his claims with the Boy Scouts of America and HOAC, and in 2017 the trial judge entered judgment against Mr. Mackey and awarded the victim $20 million in compensatory damages and $100 in punitive damages, court records show.

The victim sued Mr. Mackey as well as Travelers, Liberty and Gulf in Missouri state court in January 2021 to recover the $120 million judgment. Travelers removed the case to federal court. In July 2023, the trustee to the Boy Scouts of America’s bankruptcy plan filed a motion in the bankruptcy court to enforce the insurance entity injunction and bar the victim’s suit.

Although the bankruptcy court judge disagreed with the victim’s argument that it lacked jurisdiction to decide the motion, she found the injunction could not be enforced due to lack of actual notice.

Representatives for the parties did not respond to requests for comment.