NYC youth club to exit bankruptcy with $22 mln sex abuse settlement

MSG Knickerbockers

28/07/2023 20:21

* 
      Madison Square Boys & Girls Club faced about 140 sex abuse
claims
    

        * 
      Brooklyn clubhouse sale will provide the bulk of
settlement
funds
    

  
    By Dietrich Knauth
       (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.
    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
  

 (Reporting by Dietrich Knauth)