The Boy Scouts of America filed for bankruptcy Tuesday in what it said was an effort to safeguard compensation payouts for sexual abuse victims.
The organization has been accused of covering up generations of abuse inflicted on thousands of its young members and failing to do enough to root out pedophiles using the youth movement to prey on minors over its 110-year history.
Bankruptcy proceedings will help the Boy Scouts to "equitably compensate" victims through the establishment of a victims' compensation trust and allow the organization to continue at a local level, a statement from the group said.
The bankruptcy filing will have the effect of freezing civil lawsuits seeking damages through the courts and redirecting them toward the compensation fund.
"The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting," chief executive Roger Mosby said in the statement.
The organization estimates liabilities of up to $1 billion, according to court filings lodged Tuesday in a federal bankruptcy court in Delaware. It estimated the organization's assets as being between one and 10 billion.
It said that as of the bankruptcy filing, there were approximately 275 pending civil suits.
BSA believes publicity surrounding the case has caused other victims to come forward and has been made aware of around 1,400 additional claims of abuse, the filing says.
Michael Pfau, a lawyer for some 300 alleged victims, said the key question is how much money will be placed in the trust fund.
"On a human level, what we are hearing is initial anger and frustration that the Boy Scouts are trying to avoid accountability by doing this," Pfau told AFP.
"At the same time, there is a sense that it's finally an admission by the Boy Scouts of how bad the problem was," Pfau added.
Local councils hold around two-thirds of the organization's assets, which The Wall Street Journal has reported could be shielded from creditors under the bankruptcy plan, limiting the group's overall exposure to sexual abuse lawsuits.
More than 12,000 members of the Boy Scouts had been sexually abused in the organization since 1944, victims' lawyer Jeff Anderson said last year.
He also said files maintained by the Boy Scouts listed more than 7,800 alleged perpetrators of sexual abuse.
The existence of that documentation -- known as the "perversion files" and listing scoutmasters or troop leaders accused of sexual abuse -- was first revealed in a 2012 court case.
At the time the organization admitted its response to the scandal had been "plainly insufficient, inappropriate or wrong", and said it had overhauled its procedures to protect members.
"The BSA today has some of the strongest, expert-informed youth protection policies found in any youth-serving organization, including mandatory youth protection training and background checks for all volunteers and staff," the organization said Tuesday.
Growing number of lawsuits
Founded in 1910, the Boy Scouts of America currently has around 2.2 million members between the ages of five and 21.
Lawsuits against the group have multiplied in recent years, thanks in part to state legislative changes that have increased the statute of limitations for cases of sexual abuse against minors.
The bankruptcy plan was first mooted in 2018, the Journal reported, as the organization struggled with declining members and rising costs.
Abused in Scouting, a network of law firms representing victims, said the bankruptcy proceedings could spell the end of the Boy Scouts.
"It's going to be a mess. If it takes a long period of time, it's an open question whether the Boy Scouts will have any resources to keep operating while the bankruptcy is pending," attorney Tim Kosnoff said in a statement for the lawyers' network earlier in February.
The Boy Scouts had attempted to stay solvent by raising membership fees and mortgaging properties, Abused in Scouting said.