BOY SCOUTS OF AMERICA V. COALITION OF ABUSED SCOUTS FOR JUSTICE

Summarized by Jonathan Batiste , Rensselaer Polytechnic Institute
3 months 1 week ago

Case Type:

Business

Case Status:

Affirmed

Citation:

No. 25-1136 (3rd Circuit, Nov 21,2025) Not Published

Tag(s):

Ruling:

Appellant did not make a substantial contribution to the reorganization process under Section 503(b)(3)(D). Appellant acted out of self-interest. Appellant’s stated fees included fees unrelated to its contributions to the bankruptcy estate. Appellant duplicated the work of other interested parties. Appellant does not qualify for relief under Section 363(b) because it is neither a debtor nor a trustee. The bankruptcy court did not err in its judgment, and the district court did not err in its affirmation.

Procedural context:

Debtors filed for bankruptcy after facing declining membership and numerous lawsuits alleging sexual abuse by staff. Tort claimants split into two groups based on strategic disagreements. One group became Appellant. The other group, an official committee for the tort claimants, directed Appellant’s actions. Debtors moved to enter a restructuring support agreement, but the bankruptcy court did not authorize Debtors to enter the agreement. Debtors later filed a reorganization plan that the court approved. After the court confirmed the plan, Appellant moved to recover its expenses from Debtors. The court denied Appellant’s motion. Appellant appealed to the district court, which affirmed the bankruptcy court’s order. Appellant then appealed to the circuit court.

Facts:

Boy Scouts of America and Delaware BSA, LLC (“Debtors”) provide adult-run youth programs. Debtors reorganized in the face of mass tort claims based on allegations of sexual abuse. The Coalition of Abused Scouts for Justice (“Appellant”) was a group of claimants that participated in the reorganization. Appellant desired to recover its expenses under Section 363(b) and Section 503(b)(3)(D). After getting a plan of reorganization confirmed, Debtors did not move to pay Appellant’s expenses. Appellant moved to recover $21 million in fees and expenses, but Debtors did not support the motion. The bankruptcy court then denied Appellant's motion. The court found that Section 363(b) was not applicable because Appellant was not a trustee and because Debtors did not bring the motion. The court also found that Appellant did not qualify for reimbursement of its expenses under Section 503(b) because Appellant did not make a substantial contribution to the reorganization process. Many of Appellant’s claimed expenses benefited only Appellant. Appellant also duplicated the work of other interested parties.

Judge(s):

Shwartz, Matey, and Montgomery-Reeves

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