Facing a barrage by sex-abuse lawsuits, the Boy Scouts of America have filed for bankruptcy protection.
It is the first step in working out a potentially mammoth victim compensation plan that will allow the 110-year-old organisation to carry on.
The filing in the federal bankruptcy court in Wilmington, Delaware, on Tuesday (local time) set in motion what could be one of the biggest, most complex bankruptcies in the US.
It came lawyers seek settlements on behalf of thousands of men who say they were molested as scouts by scoutmasters, or other leaders, decades ago. These men are only now eligible to sue because of recent changes in statute-of-limitations laws in several American states.
By going to bankruptcy court, the Scouts can put those lawsuits on hold temporarily. But ultimately they could be forced to sell some of their vast property holdings, including campgrounds and hiking trails, to raise money for a compensation fund that could surpass a $US1 billion ($A1.5 billion).
“The BSA encourages victims to come forward to file a claim as the bankruptcy process moves forward,” the organisation said in a statement.
James Kretschmer of Houston, who is one of those suing, said he was molested by a Scout leader in the mid-1970s.
The bankruptcy, he said, was “a shame because, at its core and what it was supposed to be, the Boy Scouts is a beautiful organisation”.
“But you know, anything can be corrupted,” he said.
“If they’re not going to protect the people that they’ve entrusted with the children, then shut it down and move on.”
The bankruptcy represents a painful turn for an organisation that has been a pillar of American civic life for generations and a training ground for future leaders.
But the Boy Scouts’ finances have been strained in recent years by declining membership and sex-abuse settlements.
The number of young people taking part in scouting has fallen below two million, down from more than four million in peak years of the 1970s.
The organisation has tried to counter the decline by admitting girls, but its membership took a big hit on January 1 when The Church of Jesus Christ of Latter-day Saints – for decades a major sponsor of Boy Scout units – cut ties and withdrew more than 400,000 scouts in favour of its own programs.
The financial outlook got worse last year after New York, Arizona, New Jersey and California passed laws making it easier for victims of long-ago abuse to file claims. Teams of lawyers across the US have been signing up clients by the hundreds to sue the Boy Scouts.
Most of the new cases date to the 1960s, ’70s and ’80s.
Amid the crush of lawsuits, the Scouts recently mortgaged major properties owned by the national leadership, including the headquarters in Irving, Texas, and the 57,000-hectare Philmont Ranch in New Mexico, to help secure a line of credit.
The Boy Scouts have kept confidential files since the 1920s listing staff and volunteers implicated in sexual abuse. According to a court deposition, of of January those files listed 7819 suspected abusers and 12,254 victims.