Amid Lawsuits, Diocese of Rochester Files for Ch. 11 Bankruptcy

WHAM
September 12, 2019

https://13wham.com/news/local/amid-lawsuits-diocese-of-rochester-files-for-ch-11-bankruptcy

The Roman Catholic Diocese of Rochester filed for bankruptcy Thursday morning, less than one month after dozens of lawsuits were filed against clergy.

The Chapter 11 bankruptcy filing was made in U.S. Bankruptcy Court in Rochester. Bond, Schoeneck & King, PLLC is representing the Diocese in its bankruptcy case.

At least 47 sex abuse lawsuits have been filed under the Child Victims Act in Monroe County as of Thursday. Of those 47, 45 lawsuits name the Diocese of Rochester as a defendant. The Child Victims Act allows a one-year window, beginning on August 14, for child sex abuse victims to file suit without a statue of limitations.

The filing lists the Diocese as a tax-exempt entity and estimates it has fewer than 1,000 creditors. Estimates in the filing also state somewhere between $50 and 100 million in assets, with somewhere between $100 and 500 million in liabilities. Among those liabilities are “various sex abuse claimants”. The bankruptcy filing includes a list of 264 creditors.

Thursday, the Diocese published a "Letter to the Faithful", which can be read in full here:

The Diocese posted additional details about the bankruptcies online.

At a news conference Thursday, Bishop Salvatore Matano renewed his apology to all of the survivors of sex abuse - and another to Catholics, saying he acknowledges these are trying times.

Matano said he's hopeful this will be a time of restoration and renewal that brings healing to survivors. As far as changes to churches or entities tied to the diocese, Matano said, under state law, those are separately incorporated and should not be impacted by the bankruptcy.

The bishop says he believes the bankruptcy filing is the fairest way to go for the victims - and not an easy way out for the diocese.

"I don't see this in any way as a tactic," he said. "A reasonable person would look at the claims and demands that are before us, demands that are reaching $100 million. They can review our resources and would come to the conclusion we cannot minister to every victim who comes forward and help them out if we don't go this route. We do sincerely consider this the best course of action for the victims."

"Bankruptcy is a tool in the law, and like any tool it can be used for good or evil," said attorney Leander James, who represents victims in Rochester. "I hope the bishop and his bankruptcy attorneys use this tool for the good of the survivors, the community and the protection of children."

In total, the Diocese has paid out $4.27 million to 43 victims of clergy abuse. That amounts, on average, to $99,000 per victim. If the same amount were given to the 100 people who have already filed notices of intent to sue, the Diocese will pay out at least another $10 million to sex abuse survivors. That number could even go higher.

James, who has represented thousands of cases in states where similar laws have gone into effect, believes the number of cases against the Rochester Diocese will likely be between 250 and 300.

Consolidating comes with some benefits, according to James. Those without enough to substantiate a claim would still be included. Often, the settlement comes with non-monetary demands for the protection of children, such as psychological screen of priests and a child can not be left alone with fewer than two adults.

But, bankruptcy would end the discovery phase, so survivors would not know how much the diocese may have covered up its alleged abuses.

In court papers filed Thursday, the Diocese states it "does not seek Chapter 11 relief to shirk or avoid responsibility for any past misconduct by clergy...The Diocese does not seek bankruptcy relief to hid the truth or deny any person a day in court.”

Mitchell Garabedian, who represents more than 80 clergy sexual abuse victims in the Rochester area, released a statement Thursday.

The Chapter 11 bankruptcy filing by the Diocese of Rochester will not prevent victims from pursuing their rights through the bankruptcy proceeding against the Diocese of Rochester to obtain information about sexual abusers and their complicit supervisors, against relevant parish corporate entities who have not filed for bankruptcy protection and from obtaining information about assets and insurance coverage.

The victims will become creditors of the bankruptcy estate created by the Chapter 11 bankruptcy filing.

The Diocese of Rochester is one of eight dioceses in the state of New York and is the first to declare bankruptcy. It currently serves 12 counties in the Rochester area, including Monroe, Wayne, Livingston, Steuben, Ontario, Seneca, Cayuga, Tompkins, Schuyler, Chemung, Tioga, and Yates counties.

The Roman Catholic Diocese of Rochester will hold a news conference at 4:30 p.m. Thursday.

13WHAM News will continue to update this story as more information becomes available.