Syracuse Diocese Bankruptcy Case: 162 Sexual Abuse Claims from Child Victims Act

By Anthony Borelli
Binghamton Press & Sun-Bulletin via Utica Observer-Dispatch
December 22, 2020

https://www.uticaod.com/story/news/public-safety/2020/12/22/church-sex-abuse-syracuse-catholic-diocese-bankruptcy-child-victims-act/6493216002/

Victims of sexual abuse at the hands of clergy in the Roman Catholic Diocese of Syracuse might not be getting the day in court they envisioned.

Nearly six months after the Diocese of Syracuse filed for bankruptcy under the weight of 162 active lawsuits through New York state's Child Victims Act, priest sex abuse victims have a new deadline to meet if they wish to be part of a resolution to its Chapter 11 reorganization proceedings.

The diocese's filing for bankruptcy in June essentially froze all pending lawsuit cases against it, regardless of what stages those lawsuits had reached in state court. Most recently, a federal judge has set April 15, 2021 as the deadline for victims' attorneys to file proofs of claim in connection with the bankruptcy case's next stages.

“Everyone who has a claim has to file by that (April) date because that’s the basis on which the court will determine how much the diocese has to distribute and who they’re going to eventually need to pay,” said Odette Lienau, a Professor of Law at Cornell University Law School whose expertise includes bankruptcy cases.

Since 2004, some 29 Roman Catholic dioceses and religious orders nationwide have filed for bankruptcy. In New York state, the Diocese of Rochester filed for Chapter 11 in 2019, as did the Diocese of Buffalo in February 2020.

Child Victims Act and lawsuits

Many of the pending Child Victims Act lawsuits, including one federal court case involving a now 61-year-old former Binghamton resident who claimed sexual abuse at the hands of three local priests beginning in 1969, contain accusations going back decades against some perpetrators who are since deceased.

The Child Victims Act allowed victims to bring lawsuits against perpetrators and institutions regardless of how long ago the sexual abuse took place. In bankruptcy court, victims are instead considered "creditors," tasked with having to prove they are owed something by the diocese.

"Bankruptcy is a way for them (the diocese) to marshal all their assets, a way of reorganizing their problem," said Jennifer Freeman, an attorney in Westchester County. "It tends to accelerate things. In a bankruptcy court, there's a big push to resolve claims."

Within seven counties — Broome, Chenango, Cortland, Madison, Oneida, Onondaga and Oswego — the Roman Catholic Diocese of Syracuse has 119 parishes. Those, along with other entities associated with the diocese, including HOPE Appeal, Catholic Charities and Catholic Schools, are separate legal entities that are not part of the Chapter 11 filing.

Filing for bankruptcy was necessary so "available funds will be allocated fairly among all victims in accordance with the harm each suffered," Bishop Douglas Lucia said in June.

Otherwise, the diocese could spend years in lengthy court proceedings that could delay justice for victims and single jury award in one case could significantly diminish the diocese's assets.

Lucia said the Chapter 11 reorganization "seeks to establish a process in which claims will be treated in a just and equitable way."

What happens next in Syracuse diocese bankruptcy case

Once proofs of claim are filed by April 15, the diocese could raise objections that would be dealt with in subsequent court hearings.

Claims that proceed could be still be part of a trial process, but it wouldn't be in front of a jury. Instead of individual monetary awards that would've been decided in each lawsuit that had been filed, a bankruptcy court judge could determine all victims receive a certain percentage of their claims.

It's difficult to predict at the early stages how much money anyone could receive, said Gregory Germain, a Professor of Law at Syracuse University and expert on bankruptcy proceedings.

Instead of taking years to get to trial as it would in state court, it could take a matter of months to resolve the claims. Germain described it as "a more robotic process" that tends to remove the emotional element of deciding these types of cases.

"You're going to have a bankruptcy judge determining the claim and they're not as swayed by emotion as much as a jury might be," Germain said. "Plaintiffs aren't happy in general to prove their claims to a judge — they'd rather have a jury trial — although you never know how that cuts, because sometimes juries can rule against you in ways a judge wouldn't."

A possible development in the proceedings is that claims could be argued in bankruptcy court by representatives trying to negotiate a fund or a pool of money that could be made available to pay out to the victims, Lienau said.

"You have a group of victims who are, procedurally speaking, at different stages of litigation against the diocese," she said. “So all of them, oftentimes, would be put in a single class, and part of the goal of the representatives of the class is to make sure they’re all treated equally regardless of their litigation stage."

How bankruptcy affects sex abuse victims

The diocese bankruptcy filing also means the deadlines of the Child Victims Act no longer apply, though victims can still bring legal action against other perpetrators and institutions covered under the act until the state's deadline of Aug. 14, 2021.

Victims should still feel encouraged to come forward, Freeman said. For those who would seek claims against the diocese, the April deadline for filing proofs of claim applies regardless of whether a lawsuit had previously been filed.

"What clients ultimately want is criminal proceedings, and that's not possible," Freeman said of victims in these decades-old abuse cases. "What a lot of these people want is to be heard, that it wasn't their fault."