Utahns Learn What Happened to $2.5 Billion Boy Scout Victim Fund

What happened to the $2.5 billion set aside for victims of scouting that bankrupted the organization? Mostly some lawyers got really rich and even some hedge funds. Here's where the case stands currently and how much has been spent on lawyer fees.

Claim Filing: Opportunities and Challenges

Ken LeCorte did the leg work on understanding this case and presented it on his YouTube Channel. It is a story of an American organization that became a feeding frenzy for opportunists that may have drowned out real claimants.

When states opened a window for the statute of limitations on cases, the Boys Scouts filed for bankruptcy and set up a $2.5 billion fund to pay victims. This attracted several law firms that began filing claims.

Unpacking Claim Filing: A Legal Free-for-All

Soon after, internal files were published and made available a listing of problem leaders with dates and locations of possible abuse. This was information the Boy Scout organization had noted down over several years.

This made the ability to file a claim easy as it could include names and dates and the claims were hard to prove as to their validity. Law firms began seeking out victims through court approved advertising and soon claims ballooned into tens of thousands.

The Cost of Legal Battles: Fees and Expenses

What resulted is possible fraudulent claims that actually took away from those who truly did deserve a payout. Law firms and even hedge fund got in on filing claims and accumulating processing the fees.

Today, $245 million has been paid out in administrative costs and legal fees to law firms. On top of that, the rewards that have been paid to claimants are subject to the lawyers fees of 33% to 40%. Most of these awards are in the range of $3,500.

Very little of the fund has been distributed to claimants. Most of the fund is still bound up in the courts and the legal fighting continues. It is a stunning story of money and litigation that sound way too familiar.