To: Local Board Members
From: Gary Mertz, SE and Council President Michael Hooper
Subject: An Important Update from Istrouma Area Council
Dear Members of the Board,
I’d like to thank you all for your continued support of the mission of Scouting in the council territory. It is thanks to volunteers like you that we are able to provide unmatched experiences, while doing our part to keep kids safe.
As you all know, over the past year, the national Boy Scouts of America has been exploring options that allow the BSA to achieve two key imperatives: live up to our social and moral responsibility to equitably compensate victims who suffered abuse during their time in Scouting, and ensure that we carry out our mission to serve youth, families and local communities through our programs.
Today, the national organization provided local council leadership with an update of where they are in this process. Let me preempt this by saying that the national organization has not made any final decisions.
While no decisions have been made, the national organization is now exploring a managed Chapter 11 financial restructuring as a potential means of achieving its goals.
To be clear: In any scenario under consideration, only the national organization – and not the local councils – would file for Chapter 11. Any path pursued would ensure that Scouting continues for many years to come.
If the national organization chooses this course, the expectation is that the resulting plan of reorganization would create a victims’ compensation trust that would be used to equitably compensate victims. The national organization had initially envisioned funding the victims’ compensation trust with its own assets and insurance. However, based on the discussions that have happened to date with attorneys representing victims, it is now possible some councils might also contribute. We have been assured this process would be entirely voluntary. Local leadership, yourselves included, would decide whether or not we should contribute to the Trust.
As the national organization continues to explore what a managed Chapter 11 filing might look like, there are a few decisions our council will have to make in the coming days and weeks under your stewardship:
- The BSA facilitated the creation of an Ad Hoc Committee of local councils who will participate in the process and have an ongoing voice, as a group, in any restructuring efforts. If we decide to work with the Ad Hoc Committee, it will give us access to more detailed information and insight from our own representatives, while keeping privileged information confidential. Our understanding is that it will also give councils time to plan, gather information and substantively and collaboratively engage with the process. We’ve been told our council will receive information on the Ad Hoc Committee to inform our decision on participating shortly.
- To help guide next steps, the national organization is also establishing a tool to hold information about national and local council assets, referred to as a “data room.” This information would be used in the continuing efforts to reach a comprehensive resolution of abuse claims against the national organization and local councils. All local councils have been asked to verify and submit asset information. The national organization believes that proactively providing this information would speed up a potential restructuring process. That said, we are free to choose whether we want to submit additional information and ultimately whether we want to contribute any of our assets to a Trust.
- Working with the Ad Hoc Committee does not obligate our council to contribute funds to this effort. Each council is an independent nonprofit organization separate from the national organization.
[In consultation with our council attorney, we will convene a Board meeting as soon as possible so that we can discuss in more detail where things stand today, and what decisions we may need to consider the day sand weeks ahead.]
The national organization has provided us with the materials we need to communicate with our local Scouting community, should this information become public. We are prepared for any necessary discussions with employees, donors, vendors and partners to ensure them of our commitment to continuing our mission and meeting our obligations to them.
Meanwhile, we remain focused on our life-changing mission and the exciting things underway here at the Istrouma Area Council. Thank you again for your continued support. We will continue to share updates on next steps as we receive them. If you have any questions, please do not hesitate to reach out.
Yours in Scouting,