Not every bankruptcy happens because a company can't bring in enough revenue to pay its bills. That's a traditional path that happens a lot — Bed Bath & Beyond, Tuesday Morning, and Christmas Tree Shops followed that script — but it's not the only path.
Sometimes, a company can be forced into bankruptcy because of legal liabilities. This can happen in a case like the current Johnson & Johnson JNJ saga where the company faces a class action lawsuit over its baby powder/talc and whether it causes cancer.
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The results of those upcoming lawsuits, and many past cases, have cost the company billions and it expects to pay billions more. A bankruptcy could, in theory, help the company settle those lawsuits and reorganize its business.
J&J has not filed yet, because a court blocked its efforts, but it remains likely to find a path to a Chapter 11 filing. That's perhaps not the outcome the plaintiffs in the talc cases want, but it remains the likely one.
That's the path the Boy Scouts of America (BSA) followed. The beloved institution filed for bankruptcy in 2020 after over 80,000 men made claims that they were sexually abused while they were Boy Scouts.
A court allowed the BSA to keep operating while it reached a $2.4 billion settlement deal that will include payment to most who claimed abuse. The group emerged from bankruptcy in April and was very careful in the words used to announce the settlement.
“This is a significant milestone for the BSA as we emerge from a three-year financial restructuring process with a global resolution approved with overwhelming support of more than 85% of the survivors involved in the case,” said then-CEO Roger Mosby. “Our hope is that our Plan of Reorganization will bring some measure of peace to survivors of past abuse in Scouting, whose bravery, patience, and willingness to share their experiences has moved us beyond words.”
Now, about six months after coming out of Chapter 11, the Boy Scouts of America has a new CEO.
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What's next for the BSA?
The sexual abuse scandal pushed the Boy Scouts to the brink. It was marked by past Eagle Scouts mailing the organization their hard-won honors and renouncing the group.
In its new guise, the BSA has made youth safety a core tenet.
"The perspective and priorities of survivors will be forever ingrained in the BSA’s programming moving forward through new youth safety measures, places of recognition at its High Adventure bases across the United States, and a special pathway to Eagle Scout for those whose journey was interrupted during their time in Scouting," the group shared on its website.
Now, the BSA has a new CEO to lead it forward, former Leidos CEO Roger Krone. During his time at Leidos, the Fortune 250 government technology company nearly tripled its revenue while doubling its workforce.
An Eagle Scout takes the helm
An Eagle Scout, Krone spent his summers at Scout camp and Philmont Scout Ranch.
“As a life-long Scout, the opportunity to lead the Scouting movement represents the perfect capstone to a long and fruitful career and a chance to give back,” Krone said. “The program was a big part of my life and the lives of my children. I want to make sure every child has an opportunity to have that same amazing experience.”
The BSA began its search process in the spring and used Korn Ferry to lead the process, which included representation from a number of groups devoted to keeping Scouting alive. That group included youth, Scout executives, and BSA alumni.
