Reps. Sykes, Ross, Tenney, and De La Cruz Reintroduce Legislation to Support Survivors of Child Sex Abuse Through Bankruptcy Reform

Reps. Sykes, Ross, Tenney, and De La Cruz Reintroduce Legislation to Support Survivors of Child Sex Abuse Through Bankruptcy Reform

Entities including youth groups, sports governing bodies, and religious organizations have filed for bankruptcy and limited justice for survivors

WASHINGTON, D.C. - Today, U.S. Representatives Emilia Sykes (OH-13), Deborah Ross (NC-02), Claudia Tenney (NY-24), and Monica De La Cruz (TX-15) reintroduced the bipartisan Closing Bankruptcy Loopholes for Child Predators Act, which will address misuse of the bankruptcy system by organizations facing lawsuits for child sex abuse.

As more states eliminate or extend civil statutes of limitations for child sex abuse, many organizations are facing a high volume of lawsuits from individuals who were abused as children through participation in these organizations-including the Boy Scouts of America, Catholic archdioceses, and USA Gymnastics. These organizations often end up filing for bankruptcy, which allows them to stop discovery and silence survivors.

"Survivors deserve justice, accountability, and transparency at every step of the process," said Rep. Sykes. "No one should be able to use bankruptcy proceedings as a shield to avoid responsibility. This bill closes those loopholes so survivors can continue their pursuit of justice and bad actors are held fully accountable."

"Too many organizations that previously turned a blind eye to horrendous and unspeakable abuse have evaded full responsibility for their actions by filing for bankruptcy," said Rep. Ross. "Survivors of child sex abuse have seen justice delayed and too often denied because of unacceptable loopholes in our bankruptcy system that have allowed large organizations to avoid the consequences of their negligence and abuse. While no law can undo the trauma survivors have endured, this legislation will get us one step closer to a justice system where survivors have a fair chance of fighting for the remedies they are owed."

"Survivors of child sexual abuse deserve the chance to be heard and to pursue justice without being shut down by legal loopholes," said Rep. Tenney. "For too long, some organizations have used bankruptcy to stall cases and avoid full accountability. That is wrong. This bill helps make sure survivors are not silenced and that those responsible cannot hide from the truth. It is about fairness, accountability, and making sure our legal system works for victims, not against them."

"There should never be a loophole for organizations to evade any crime, especially not one as horrific as child sex abuse. For too long, bankruptcy proceedings served as a shield, silencing survivors and standing in the way of justice. The Closing Bankruptcy Loopholes for Child Predators Act will finally reinstate transparency for survivors and full accountability for organizations," said Rep. De La Cruz.

The Closing Bankruptcy Loopholes for Child Predators Act would:

• Allow child sex abuse victims to continue conducting discovery during bankruptcy proceedings. Currently, the initiation of bankruptcy proceedings halts other active civil litigation in cases involving child sex abuse.
• Allow child sex abuse victims to submit victim impact statements in Chapter 11 proceedings. This will allow child sex abuse victims to be heard during bankruptcy proceedings and before any consideration of a reorganization plan, ensuring that their experiences are taken into account.
• Require forensic accountants to assess the debtor's estate and nondebtor holdings in child sex abuse cases. This will ensure that debtor organizations are fairly submitting their assets for consideration in a reorganization plan and enable victims of child sex abuse to receive fair remedies.

Organizations that have filed for bankruptcy due to sexual abuse claims include: USA Gymnastics; Boy Scouts of America; Baltimore Archdiocese; Diocese of Tucson, AZ; Diocese of Spokane, WA; Diocese of Davenport, IA; Diocese of San Diego, CA; Archdiocese of New Orleans, LA; Diocese of St. Cloud, MN; Diocese of Camden, NJ; Diocese of Norwich, CT; and more.

Bill text is available here.