Likely mediator named; claim deadline, forms set in bankruptcy

By Mike Latona
Catholic Courier
March 2, 2020

https://catholiccourier.com/articles/likely-mediator-named-claim-deadline-forms-set-in-bankruptcy

In late February, U.S Bankruptcy Judge Paul R. Warren tentatively approved a mediator in the Diocese of Rochester’s Chapter 11 case, approved a form for filing victim claims, and set an Aug. 13, 2020, deadline for such claims to be filed.

These actions came two weeks after Warren ruled that an attorney for sexual-abuse victims could question Bishop Emeritus Matthew H. Clark under oath about his knowledge of sexual abuse during his tenure as bishop.

On Feb. 25, Warren announced his tentative approval of Judge Gregg Zive, a Nevada federal bankruptcy judge, to serve as mediator, pending approval from the chief judges of Warren’s own Second Circuit of the U.S. Court of Appeals and the Ninth Circuit to which Zive belongs.

Warren noted that “all parties in interest” — attorneys representing the diocese, an unsecured creditors’ committee and insurance companies — have agreed on Zive as mediator.

The mediator’s role involves working with the various parties to determine insurers’ financial obligations toward an estate to satisfy creditor demands. During a bankruptcy hearing on Nov. 21, Warren had urged mediation in the diocesan case. Both Stephen A. Donato, an attorney representing the Diocese of Rochester, and Ilan Scharf, an attorney representing the creditors’ committee, had supported Warren’s suggestion, noting that mediation has typically been used when other U.S. dioceses and archdioceses have filed for reorganization.

Warren’s Feb. 25 order established Aug. 13, 2020, as the final date for victims to file claims against the diocese in the bankruptcy case. That date also will mark the closing of a one-year window established by New York state’s Child Victims Act for the filing of sexual-abuse claims that previously were barred by statutes of limitations.

Also that day, Warren approved a “proof of claim” form (see related story below) that those wishing to make claims under the CVA will be required to submit for the bankruptcy court’s review. Attorneys from the diocese, creditors’ committee and insurance companies had discussed drafts of the form during a Feb. 11 hearing before Warren in bankruptcy court.

In another development at the Feb. 11 hearing, Warren ruled that Bishop Clark could be questioned under oath by one attorney representing the creditors’ committee. Victims’ attorneys had filed a motion one month earlier, requesting the right to interrogate the 82-year-old prelate about the extent of his knowledge of abuse during his 33-year tenure as Rochester’s Catholic bishop, which concluded with his 2012 retirement. Bishop Clark’s attorney, Mary Jo S. Korona, argued Feb. 11 that the bishop “is not able to competently testify,” having been diagnosed with early-stage Alzheimer’s disease in July 2019. The bishop made his diagnosis public approximately one month later.

Acknowledging the possibility that the bishop’s medical condition could cause him to become forgetful or confused, Warren stipulated that questioning take place within 30 days of his Feb. 11 ruling; be conducted in a single day; last no more than three hours including breaks; and take place with only one attorney each representing the diocese and the unsecured creditors’ committee, plus Bishop Clark’s attorney. His ruling did not permit the participation by attorneys representing insurers.

Warren said Bishop Clark could bring with him a medical authority who would have the right to ask for questioning to cease if the bishop were to become overwhelmed by the process. Although Warren said a transcript would eventually become available to the public, the judge said no audio or video recording of the deposition would be permitted.

In addition, Warren ruled that Bishop Clark must produce any personal written information still in his possession— diaries, letters, etc. — that might contain information related to clergy sexual abuse.

When the diocese filed for Chapter 11 protection Sept. 12, 2019, Bishop Salvatore R. Matano said the diocese would be financially unable to satisfy all the claims filed against it. Rochester was the first diocese or archdiocese in New York to file for bankruptcy. The Diocese of Buffalo followed suit Feb. 28.