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BOY SCOUTS of AMERICA and DELAWARE BSA, LLC, Debtors

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BOY SCOUTS of AMERICA and DELAWARE BSA, LLC, Debtors Case 20-50527 Doc 14 Filed 02/26/20 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 BOY SCOUTS OF AMERICA AND Case No. 20-10343 (LSS) DELAWARE BSA, LLC,1 Jointly Administered Debtors. BOY SCOUTS OF AMERICA, Plaintiff, Adv. Pro. No. 20-50527 (LSS) v. A.A., et al,2 Re: A.D.I. 2, 4, 5 Defendants. NOTICE OF FILING OF REVISED PROPOSED REDACTED VERSION OF VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF PLEASE TAKE NOTICE that, on February 18, 2020, the Boy Scouts of America (the “BSA”), as the non-profit corporation that is a debtor and debtor-in-possession in the above- captioned bankruptcy case and plaintiff in this adversary proceeding filed the Verified Complaint for Injunctive Relief (the “Complaint”) under seal. PLEASE TAKE FURTHER NOTICE that, in connection with the filing of the Complaint under seal, the BSA filed the Plaintiff’s Motion for Entry of an Order Authorizing the Debtors to File Under Seal (I) Exhibit A to the Complaint and (II) the Griggs Declaration (the “Motion to Seal”).3 PLEASE TAKE FURTHER NOTICE that, in accordance with Local Rule 9018-1(d), and as set forth in the Motion to Seal, the BSA filed the Notice of Filing of Proposed Redacted Version of 1 The Debtors in these chapter 11 cases, together with the last four digits of each Debtors’ federal tax identification number, are as follows: Boy Scouts of America (6300) and Delaware BSA, LLC (4311). The Debtors’ mailing address is 1325 W. Walnut Hill Ln., Irving, TX 75038. 2 A full list of the Defendants in this adversary proceeding, in redacted form to protect the privacy interests of abuse victims, is included as Exhibit A to the Complaint attached hereto. The Complaint, with unredacted versions of the exhibits thereto, will be served on each Defendant’s counsel. 3 Capitalized terms not defined herein are defined in the Motion to Seal. Case 20-50527 Doc 14 Filed 02/26/20 Page 2 of 3 Verified Complaint for Injunctive Relief (A.D.I. 5), and attached thereto as Exhibit A was a proposed redacted copy of the Complaint. PLEASE TAKE FURTHER NOTICE that, in accordance with Local Rule 9018-1(d), and as set forth in the Motion to Seal, the Debtors have attached hereto as Exhibit A a revised proposed redacted copy of the Complaint, with redacted exhibits thereto. [Remainder of Page Intentionally Left Blank] 2 Case 20-50527 Doc 14 Filed 02/26/20 Page 3 of 3 Dated: February 26, 2020 MORRIS, NICHOLS, ARSHT & TUNNELL LLP Wilmington, Delaware /s/ Eric W. Moats Derek C. Abbott (No. 3376) Andrew R. Remming (No. 5120) Joseph C. Barsalona II (No. 6102) Eric W. Moats (No. 6441) Paige N. Topper (No. 6470) 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, Delaware 19899-1347 Telephone: (302) 658-9200 Email: [email protected] [email protected] [email protected] [email protected] [email protected] – and – SIDLEY AUSTIN LLP Jessica C. K. Boelter (admitted pro hac vice) 787 Seventh Avenue New York, New York 10019 Telephone: (212) 839-5300 Email: [email protected] – and – SIDLEY AUSTIN LLP James F. Conlan (admitted pro hac vice) Thomas A. Labuda (admitted pro hac vice) Michael C. Andolina (admitted pro hac vice) William A. Evanoff Matthew E. Linder (admitted pro hac vice) One South Dearborn Street Chicago, Illinois 60603 Telephone: (312) 853-7000 Email: [email protected] [email protected] [email protected] [email protected] [email protected] PROPOSED COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION 3 Case 20-50527 Doc 14-1 Filed 02/26/20 Page 1 of 95 EXHIBIT A Redacted Complaint Case 20-50527 Doc 14-1 Filed 02/26/20 Page 2 of 95 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 BOY SCOUTS OF AMERICA AND Case No. 20-10343 (___) DELAWARE BSA, LLC,1 Joint Administration Pending Debtors. BOY SCOUTS OF AMERICA, Plaintiff, Adv. Pro. No. 20-50527 (___) v. A.A., et al.,2 Defendants. VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF The Boy Scouts of America (the “BSA”), as the non-profit corporation that is a debtor and debtor-in-possession in the above-captioned bankruptcy case and plaintiff in this adversary proceeding, alleges for its Verified Complaint (the “Complaint”), upon knowledge of its own acts and upon information and belief as to other matters, as follows: NATURE OF THE ACTION AND THE NEED FOR RELIEF 1. This is an adversary proceeding brought pursuant to Rules 7001(7) and 7065 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and sections 105(a) and 362 of title 11 of the United States Code (the “Bankruptcy Code”). This adversary proceeding 1 The Debtors in these chapter 11 cases, together with the last four digits of each Debtors’ federal tax identification number, are as follows: Boy Scouts of America (6300) and Delaware BSA, LLC (4311). The Debtors’ mailing address is 1325 W. Walnut Hill Ln., Irving, TX 75038. 2 A full list of the Defendants in this adversary proceeding is included in redacted form on Exhibit A attached hereto to protect the privacy interests of abuse victims. An unredacted version of this Complaint and Exhibit A hereto will be served on each Defendant’s counsel. 1 Case 20-50527 Doc 14-1 Filed 02/26/20 Page 3 of 95 seeks to extend the stay to enjoin the prosecution of the Pending Abuse Actions (as defined below) asserted against the BSA Related Parties (as defined below). 2. The BSA, together with certain independently incorporated local councils (the “Local Councils”) and chartered organizations (the “Chartered Organizations”) that collectively operate under the BSA federal charter to deliver the Scouting program, currently are co- defendants in approximately 275 pending civil actions in state and federal courts around the country asserting personal injury abuse claims and causes of action (collectively, the “Pending Abuse Actions”).3 The preliminary injunction sought in this Complaint applies to the Pending Abuse Actions as against the BSA, to the extent not already covered by the automatic stay, and the claims and causes of action asserted against (i) non-debtor Learning for Life, a non-stock organization affiliated with the BSA (“LFL”), (ii) the non-debtor Local Councils, and (iii) all other non-debtor Chartered Organizations, to the extent they are named as co-defendants with the BSA, a Local Council, and/or LFL in a Pending Abuse Action ((i), (ii), and (iii), collectively, the “BSA Related Parties”).4 3. The BSA seeks a preliminary injunction to enjoin the continued prosecution of, and to extend the automatic stay to (if not otherwise subject to the automatic stay imposed by section 362 of the Bankruptcy Code), the Pending Abuse Actions as against the BSA and the BSA Related Parties, for a period of 180 days from the issuance of the injunction. 4. The BSA seeks this preliminary injunction to avoid the irreparable harm to its estate and its prospects for reorganization that would occur if such litigation were allowed to continue unabated. As long as the Pending Abuse Actions are actively prosecuted against the 3 A list of the Pending Abuse Actions to be stayed is attached as Exhibit A hereto. The BSA only seeks to stay the Pending Abuse Actions to the extent they assert claims against the BSA or any of the BSA Related Parties identified on Exhibit B hereto. 4 As noted above, a list of BSA Related Parties is included in Exhibit B to this Complaint. 2 Case 20-50527 Doc 14-1 Filed 02/26/20 Page 4 of 95 BSA and/or the BSA Related Parties, the value of the estate will continue to be rapidly eroded by the staggering direct and indirect costs of litigation. The BSA spent more than $150 million on settlements and legal and related professional costs from 2017 through 2019 alone. 5. In addition to these the hard costs, the prosecution of the Pending Abuse Actions would result in substantial and relentless pressure on the BSA’s operations and employees. For example, unless the stay is extended, the BSA would be required to engage in piecemeal litigation on behalf of the BSA Related Parties, even as it attempts to resolve claims against itself in its bankruptcy case. This involvement would include formulating litigation strategies, assisting in discovery, protecting against disclosure of privileged or otherwise protected documents, attending depositions, preparing witnesses and a myriad of other litigation tasks. Moreover, the BSA and its employees would be distracted during this critical stage from, among other things, negotiating an equitable, global resolution of all of the Pending Abuse Actions and pursuing a plan of reorganization. Absent the requested relief, these monetary and non-monetary costs will continue, regardless of whether the Pending Abuse Actions proceed against only the BSA Related Parties. 6. The requested injunction supports the strategy of the entire chapter 11 restructuring of the BSA and Delaware BSA, LLC (collectively, the “Debtors”). To that end, along with the breathing spell the BSA seeks herein, the Debtors are in the process of seeking other forms of relief in furtherance of their dual objectives in these chapter 11 cases: (a) the timely and equitably compensating victims of abuse in Scouting and (b) ensuring that the BSA emerges from bankruptcy with the ability to continue its vital charitable mission. Namely, the Debtors are (a) establishing and populating an electronic data room with information regarding the BSA’s and the Local Councils’ assets, including any restrictions on such assets; (b) assisting 3 Case 20-50527 Doc 14-1 Filed 02/26/20 Page 5 of 95 in the formation of an ad hoc committee of Local Councils; (c) engaging
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