New York’s Catholic church leaders control billions outside the reach of abuse survivors

ALBANY (NY)
Times-Union

February 11, 2021

By Edward McKinley

Bankruptcy filings and assets shifted to foundations have coincided with passage of Child Victims Act

The Catholic bishops of New York sold a lucrative insurance business they controlled and stored the proceeds in a foundation they also administer, keeping billions out of the reach of survivors of childhood sexual abuse.

The move occurred in 2018, with the church selling its Fidelis Care insurance company and moving $4.3 billion of the proceeds into the new Mother Cabrini Health Foundation. At the same time, the Child Victims Act in New York was gaining momentum in the Legislature, a measure that the church had lobbied against for more than a decade. It was ultimately signed into law a year later; and it has exposed the church to thousands of lawsuits alleging sexual abuse of children and, in some instances, the coverup of those incidents and shielding of predators.

It has been the church’s practice across the country for more than a decade to divert swarms of abuse claims into bankruptcy proceedings rather than handling each in individual court proceedings. That strategy allows the church to often avoid public trials or witness depositions, and to handle claims in one court proceeding that potentially will preserve more of their financial assets. Four of the eight dioceses in New York have already declared bankruptcy, as abuse lawsuits continuing to pour in across the state.

“This is certainly a transaction that is on our radar,” said Ilan D. Scharf, an attorney at Pachulski Stang Ziehl & Jones in New York City, which has specialized for years in representing abuse survivors in diocesan bankruptcy cases. “The fact that they are hiding behind what they claim are legal structures that protect these assets is no excuse for them to avoid using that money to help the victims of these dioceses.”

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