Irrevocable by Design: A Checked Box, a Confirmed Plan, and the Limits of Creditor Relief
The Third Circuit has affirmed the denial of two Boy Scouts of America abuse claimants' requests to undo their $3,500 Expedited Distribution elections, resting on plain plan language and on the statutory rule that creditors cannot modify a confirmed plan.
The Disposition
On July 17, 2026, a panel of the United States Court of Appeals for the Third Circuit affirmed the District of Delaware's order upholding the Bankruptcy Court's denial of two Direct Abuse Claimants' motions to rescind their elections of the $3,500 Expedited Distribution in the Boy Scouts of America and Delaware BSA, LLC Chapter 11 cases. The opinion, issued by a three-judge panel, was filed in the appeals docketed at Nos. 25-1826 and 25-1900 and entered on the bankruptcy court docket at Case No. 20-10343 (LSS), Doc 13536, on July 20, 2026.
Two features of the opinion define its reach. The first is that it is a non-precedential disposition, which under the court's internal operating procedures is not an opinion of the full court and does not constitute binding precedent. The second is that the panel affirmed on two connected grounds. The Plan's language does not permit rescission, and because the Plan incorporates the TDP election process, a request to undo an election is a request to modify the Plan, which creditors have no power to make.
The case was submitted under Third Circuit L.A.R. 34.1(a) on May 12, 2026, without oral argument.
The Ballot Did Two Jobs
The Plan channeled all abuse claims against the debtors to a Settlement Trust for liquidation and payment, and it incorporated Trust Distribution Procedures giving Direct Abuse Claimants three options for liquidation and payment of their claims. The Expedited Distribution was one of those three. The other two are not identified by name in the opinion, which describes them only as paths that might lead to a greater recovery.
The mechanism for choosing among them is the fact that drives the entire dispute. The same instrument that a claimant used to vote for or against confirmation of the Plan was the instrument used to make the remedy election. A claimant elected the Expedited Distribution by checking a box on the ballot. Claimants were instructed to read the instructions carefully before completing the ballot, and by signing it they acknowledged receiving the Disclosure Statement and the Plan and stated that they understood, and if accepting the Plan agreed with, the treatment provided for their claims.
Over 7,300 Direct Abuse Claimants checked the box. After the Plan took effect, 273 of them moved to rescind that election and to participate in the other options, contending they had checked the box by mistake. Both appellants stated that they did not intend to elect the Expedited Distribution and did not discuss the option with their counsel, and their counsel stated that they did not realize their clients' mistakes until they accessed a portal showing the elections, roughly ten weeks before the revocation motions were filed.
The Bankruptcy Court denied the 273 requests together. Two of those claimants carried the question to the District Court and then to the Third Circuit in the appeals resolved by this opinion.
Procedural Path
The rescission dispute has now been decided the same way at three levels, over a period that runs from the plan confirmation ruling in 2022 to this month's affirmance.
| Court | Holding | Citation |
|---|---|---|
| Bankruptcy Court | Rescission would be an impermissible modification of the Plan because the relief sought is directly contradicted by the Plan. | 2024 WL 459571, at *12-13, *17-18 (Bankr. D. Del. Feb. 5, 2024) |
| District Court | Affirmed on four grounds: unambiguous Plan language bars changing elections; the Plan is not truly silent on revocation; gap filling was properly declined even if the Plan were silent or ambiguous; and the requested relief was an impermissible modification. | 772 F. Supp. 3d 496, 510, 511, 511-12, 514-16 (D. Del. 2025) |
| Third Circuit | Affirmed. The Plan is unambiguous as to the nonrevocable election, and the relief sought would modify the Plan, which creditors cannot do under Section 1127(b). | Nos. 25-1826 & 25-1900 (3d Cir. July 17, 2026) (not precedential) |
The panel applied the standard framework for a bankruptcy appeal that reaches the court of appeals through the district court. It stood in the shoes of the District Court and applied the same standard of review, examining legal determinations de novo, factual findings for clear error, and discretionary decisions for abuse of discretion, citing In re Somerset Regional Water Resources, LLC, 949 F.3d 837, 844 (3d Cir. 2020).
A Confirmed Plan Is Read Like a Contract
The panel began where the Third Circuit begins with confirmed plans, applying contract principles under In re Shenango Group Inc., 501 F.3d 338, 344 (3d Cir. 2007). Delaware law supplied the interpretive rules because the parties selected it for interpreting the plan. Under Lorillard Tobacco Co. v. American Legacy Foundation, 903 A.2d 728, 739 (Del. 2006), clear and unequivocal contract language binds a party to its plain meaning, and under Samuel J. Heyman 1981 Continuing Trust v. Ashland LLC, 284 A.3d 714, 721 (Del. 2022), ambiguity exists only where the provisions in controversy are reasonably or fairly susceptible of different interpretations.
Applied to this record, the analysis was short. The TDP entitles claimants who elect the Expedited Distribution on their ballots to a one-time payment of $3,500. The ballot notified claimants that checking the box was the act of electing. The TDP states that claimants who elect are not eligible to receive any further distribution through either of the other two options. Neither the Plan, the TDP, nor the ballot provides a mechanism to rescind the election once made.
The Operative Gap
The panel did not point to a Plan provision declaring elections irrevocable. It found irrevocability in the combination of two things: the absence of any rescission mechanism in the Plan, the TDP, or the ballot, and the express statement that electing claimants are not eligible to receive any further distribution through the other two options. Silence on the way out, paired with language closing off the alternatives, was read as a complete answer.
When the Election Became Effective
The claimants advanced a textual argument worth noting because it is the kind of argument that will surface again in other trust distribution regimes. They contended that checking the box did not complete the election, because the TDP requires a claimant to satisfy other criteria, including signing a release, before receiving payment. On that reading, the election is a multi-step process that is not final until the last step is taken, and a claimant who has not signed a release has not yet elected anything.
The panel rejected the argument in a footnote, and the basis was the preposition. Nothing in the TDP indicates that those criteria must be satisfied for a claimant to make an election. The TDP states that a claimant must satisfy the criteria to receive payment. Conditions on disbursement are not conditions on choice.
| Step | What the TDP Requires | Effect Under the Panel's Reading |
|---|---|---|
| Check the box on the ballot | Election of the Expedited Distribution | The election is made and cannot be undone |
| Satisfy certain criteria and submit documentation | Prerequisites stated as conditions to receive payment | Affects when and whether the $3,500 is paid, not whether the election occurred |
Why Gap Filling Was Not Available
The fallback position was that if the Plan is silent or ambiguous about revocability, the Bankruptcy Court could supply an implied procedure for revoking an initial remedy election. Delaware law does allow courts to fill gaps in the express provisions of an agreement by cautiously supplying implied terms, but only where the contract is silent on the subject and the parties failed to foresee the need for a term or determined that such a need was unlikely, citing In re El Paso Pipeline Partners, L.P. Derivative Litigation, 2014 WL 2768782, at *16-18 (Del. Ch. June 12, 2014), and Reklam v. Bellator Sport Worldwide LLC, 2017 WL 5172397, at *5 (D. Del. Nov. 8, 2017).
The panel took this up in the alternative, framing the question as whether the Bankruptcy Court acted reasonably in declining to conclude that the Plan impliedly supplied a revocation procedure. Two record facts closed the door. The parties considered whether to provide for the opportunity to rescind an Expedited Distribution election at a hearing before the Plan was confirmed, and chose not to. And it was reasonable to conclude that the Plan was not truly silent, because it did not use conditional terms but instead gave claimants a choice without providing a means to change that choice once made.
The panel framed the consequence through Aspen Advisors LLC v. United Artists Theatre Co., 843 A.2d 697, 707 (Del. Ch. 2004), which holds that gap filling is not warranted where it grants parties contractual protections that they failed to secure for themselves at the bargaining table
. A term that was raised and abandoned in negotiation is not a gap. It is a decision.
The Independent Statutory Bar
The interpretive holding answers what the Plan permits. The next part of the opinion answers who may ask to change it. A confirmed plan binds all parties in interest under Section 1141(a), and it may be modified only by the plan's proponents or the reorganized debtor under Section 1127(b). The panel cited In re Rickel & Associates, Inc., 260 B.R. 673, 677 (Bankr. S.D.N.Y. 2001), for the proposition that Section 1127(b) is the only route to modifying a confirmed plan, and In re Port Liberte Partners, 1995 WL 11186, at *5 (D.N.J. Jan. 5, 1995), aff'd sub nom. In re Port Liberte, 77 F.3d 463 (3d Cir. 1996), for the conclusion that creditors are precluded by the Code from requesting modification.
Because the Plan incorporates the TDP process for elections of remedies, a request to revoke a selection that is irrevocable under the Plan is a request to modify the Plan. The supporting authorities are older and newer versions of the same idea. In Matter of Allied Supermarkets, 21 B.R. 45, 48 (Bankr. E.D. Mich. 1982), a creditor's attempt to file a tardy ballot and revoke an earlier election was treated as an attempt to modify the plan. In In re SC SJ Holdings, LLC, 2023 WL 2598842, at *5 (D. Del. Mar. 22, 2023), aff'd, 2024 WL 1328233 (3d Cir. Mar. 28, 2024), cert. denied, 145 S. Ct. 277 (2024), a change contrary to the express provisions of a plan was an impermissible modification even though the change was minor.
Why the Second Ground Carries Further
The plain-language holding turns on how this Plan and this TDP were drafted. The Section 1127(b) holding turns on who is asking. Once the relief sought would change the operation of a confirmed plan, the movant's status as a creditor is dispositive, and SC SJ Holdings adds that the modest size of the change does not alter the analysis.
Section 105 and Rule 60(b)(1) Do Not Reopen the Door
Both of the usual escape hatches were addressed and both were closed in the same footnote. Section 105 generally affords bankruptcy courts broad discretion to grant relief, but a bankruptcy court cannot exercise that discretion in a way that violates Section 1127. The panel quoted Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988), for the principle that whatever equitable powers remain in the bankruptcy courts can only be exercised within the confines of the Bankruptcy Code.
Rule 60(b)(1) fared no better. The rule permits relief from an order on the basis of mistake, and mistake is precisely what the claimants asserted. But a rule of procedure cannot negate the substantive impact of a restriction contained in the Bankruptcy Code, citing In re Fesq, 153 F.3d 113, 117 (3d Cir. 1998). The claimants' theory of the case was that they made an error. The panel's answer was that the existence of an error does not create a power in the bankruptcy court that the Code withholds.
Drafting Implications for Trust Distribution Regimes
The practical lesson sits in the drafting, not the appeal. If you are building trust distribution procedures that ask claimants to choose among liquidation options with materially different economics, this opinion tells you what the reviewing courts will do with the choices you did not write down.
Start with the instrument. A ballot that serves as both the confirmation vote and the remedy election compresses two decisions with different stakes into a single document, completed once. The opinion records that instructions were provided and that signature carried an acknowledgment of receipt and understanding. That was enough. If a plan proponent wants a different result for claimants who select in error, the mechanism has to be in the plan, the TDP, or the ballot, because the courts here found no basis to supply one.
Then consider the negotiation record. The most consequential factual finding in the gap-filling analysis is that the parties took up revocability at a pre-confirmation hearing and left it out. In Delaware contract analysis, that history supports treating the omission as deliberate rather than as a gap. If your negotiation touches a term and does not adopt it, assume that the record of having touched it will be used against a later argument that the parties never contemplated the issue.
Finally, note where the analysis lands for a claimant who checks the wrong box. Section 1127(b) means that the creditor cannot ask for a fix. Section 105 means the court cannot supply one that conflicts with Section 1127. Rule 60(b)(1) means the label of mistake does not change either answer. The remaining paths, if any exist, run somewhere other than a motion to modify the operation of the plan.
The Design Question This Raises
Mass tort trust regimes are built to process elections at scale, and scale produces error at some rate. Over 7,300 claimants elected the Expedited Distribution here and 273 asked to undo it. Whether a plan should include a correction window, and how long that window should stay open before distributions can proceed, is a question for the drafting table. After confirmation, the courts in this case found no room to answer it.
Scope and Citation Value
The opinion is marked not precedential and states that it is not an opinion of the full court and does not constitute binding precedent under I.O.P. 5.7. Its persuasive weight is what a practitioner makes of the reasoning, not its authority.
The published decisions underneath it are a different matter. The District Court's affirmance is reported at 772 F. Supp. 3d 496 (D. Del. 2025) and sets out the four grounds the panel cited by page. The Bankruptcy Court's opinion is available at 2024 WL 459571. For a practitioner researching irrevocability of remedy elections in a confirmed plan, those are the citable sources, and the Third Circuit's disposition confirms that the analysis survived appellate review.
It is also worth being precise about what the panel did not reach. The opinion addresses the two appellants before it and the arguments they raised. It does not describe the other two TDP options in detail, does not address remedies claimants might pursue outside the plan modification framework, and does not disturb the Confirmation Order, which was separately reviewed in In re Boy Scouts of America, 137 F.4th 126 (3d Cir. 2025).