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(Reuters) - Madison Square Boys & Girls Club received court approval on Friday to exit bankruptcy with a $22 million settlement that will resolve over a hundred decades-old sexual abuse claims.
U.S. Bankruptcy Judge Sean Lane in White Plains, New York approved the youth club's bankruptcy plan, which received support from 97% of sexual abuse claimants after Madison Square agreed to sell its Brooklyn Navy Yard clubhouse.
"There's no good clubhouse to close," Lane said Friday. "But for this bankruptcy case to work and for abuse victims to be compensated, this was the unfortunate result."
Madison Square filed for Chapter 11 protection in June 2022 to address 140 abuse claims, nearly all of which stem from the conduct of a single doctor, Reginald Archibald, who volunteered at the youth club from the 1940s to the 1980s. Archibald, who died in 2007, also worked as a pediatric endocrinologist at Rockefeller University Hospital, which revealed his history of sexual misconduct in a 2018 investigation.
Rockefeller University agreed to contribute $150,000 to Madison Square's sexual abuse settlement as part of the bankruptcy plan.
Madison Square filed for bankruptcy after the passage of a 2019 New York law that eased statutes of limitations for victims of child abuse. The New York law has contributed to the bankruptcies of other organizations with histories of child sex abuse, including the Boy Scouts of America and the Catholic Dioceses of Rockville Centre, Rochester, Buffalo, Syracuse, Albany and Ogdensburg, NY.
The Navy Yard sale will provide the bulk of the recovery for sexual abuse survivors, with a $15 million sale price. Madison Square will also contribute $2.225 million in other cash, a $5 million interest-bearing note, certain insurance rights, and any cash that is left over from the $11 million it borrowed at the start of its bankruptcy case, according to court documents.
The Navy Yard sale initially drew objections from community groups who argued that they were losing a clubhouse that had provided after-school programs for under-privileged children living in nearby public housing. Attorneys for community groups and New York Attorney General Letitia James' office said Friday that they would try to convince the buyer to maintain a youth center at the property.
The case is In re Madison Square Boys and Girls Club Inc, U.S. Bankruptcy Court for the Southern District of New York, No. 22-10910.
For Madison Square Boys and Girls Club: John Weber, Andrew Parlen and Alan Kornberg of Paul, Weiss, Rifkind, Wharton & Garrison
For Rockefeller University Hospital: Gregg Galardi of Ropes & Gray
For the official committee of abuse victims: James Stang of Pachulski Stang Ziehl & Jones
Read more:
Victims of child sex abuse expected to launch wave of lawsuits in New York
New York youth club seeks to mediate 140 sex-abuse claims in bankruptcy
Special Report: Boy Scouts, Catholic dioceses find haven from sex abuse suits in bankruptcy
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