A person who was not a creditor of a bankruptcy estate was entitled to actual notice of an injunction that would bar the non-creditor from suing the debtors’ insurance carriers, a federal court has ruled. In re Boy Scouts of America and Delaware BSA LLC, No. 24-382, 2025 WL 893001 (D. Del. Mar. 24, 2025). The bankruptcy trustee had argued that the non-creditor was entitled to constructive notice, not actual notice. But the court held that both constitutional due process and the U.S. Bankruptcy Rules required actual notice.
Background
The factual background is straightforward. A person who was abused while a scout sued the Boy Scouts of America (BSA), the Heart of America Counsel (HOAC), and his abuser. The victim settled his claims against the BSA and HOAC but not the abuser. In a trial against the abuser in Missouri state court, the victim was awarded $20 million in compensatory damages and $100 million in punitive damages. A judgment was entered against the abuser.