Hartford Courant [Hartford CT]
July 17, 2021
By Stephen Singer
A bankruptcy filing by the Norwich Diocese to shield its finances as it faces lawsuits over scores of sexual abuse claims may deny full compensation to the victims, one of their lawyers said Friday.
New London attorney Kelly E. Reardon, who represents six men who accused the church of sexual abuse decades ago, said insurance coverage is “fairly limited” and may not result in full compensation.
However, oversight by a U.S. Bankruptcy Court judge in Hartford will require the diocese to fully lay out its finances, providing needed transparency as victims seek justice, she said. In its bankruptcy filing, the diocese claimed liabilities of as much as $100 million and assets of between $10 million and $50 million.
The diocese, facing nearly 60 lawsuits, filed for bankruptcy Thursday. More than two dozen dioceses in the U.S., all outside New England, have filed for bankruptcy, according to the Meneo Law Group in New Haven.
Settlements have ranged from $9.8 million for 290 victims in Fairbanks, Alaska, to $210 million to 450 victims in Minneapolis-St. Paul, according to Meneo.
The diocese said on its website it’s insured by the Catholic Mutual Relief Society of America for covered claims.
“However, the diocese has determined that the coverage is inadequate to compensate survivors,” it said.
“A Chapter 11 bankruptcy will allow the court to centralize these lawsuits, as well as help the diocese manage its litigation expenses and preserve adequate financial resources for all essential ministries,” Bishop Michael Cote said.
The diocese said operations and ministries will continue during bankruptcy proceedings and it has planned for payment of all post-bankruptcy financial obligations.
Dozens of sexual abuse lawsuits were filed against the diocese over alleged abuse at the Mount Saint John School, a shuttered residential boys’ school in Deep River. Hartford lawyer Patrick Tomasiewicz, who represents 59 clients, said the cases date to between 1991 and 2002.
He sounded optimistic about the move by the diocese to seek bankruptcy.
“I think we can say the survivors should know that the filing of this bankruptcy brings us one step closer to the finish line,” he said.
The Diocese of Norwich, established in 1953, covers Middlesex, New London, Tolland and Windham counties and Fishers Island, New York.
It was among several dioceses to receive federal COVID-19 relief money last year, obtaining a paycheck protection loan of between $350,000 and $1 million. The loans were intended to help businesses with 500 or fewer employees keep workers on the payroll while they were shut during the pandemic.
Gail Howard, a leader of Survivors Network of those Abused by Priests, or SNAP, said the diocese is more concerned about money than victims of sexual abuse.
“Their motives are financial. They’re not about caring for the weakest among us,” she said. “They’ve done everything but the right thing.”
The diocese said that by filing for bankruptcy, it will be able to “more fairly and proportionately address the claims asserted” by the survivors of abuse.
And by filing for relief under Chapter 11, the diocese said it will be able to “more fairly and proportionately” address the abuse claims. Without bankruptcy protection, the first abuse victim to obtain a judgment could possibly receive all available money, leaving little to no assets for others, the diocese said.
The diocese said it is not using bankruptcy to minimize its financial responsibilities to the survivors. A lengthy state court process will delay “justice for, and any payment to, survivors, effectively and unnecessarily prolonging their pain and suffering,” it said.
Howard said real estate holdings make the Catholic Church a very wealthy institution.
“For them to say they have limited finances, they just don’t,” she said.
Mitchell Garabedian, a Boston lawyer who spearheaded clergy sexual abuse cases, said a bankruptcy filing is “not necessarily negative” for the victims.
“A judge will order remediation and move cases along,” he said. “Many times victims will feel it’s bad when in fact it’s not necessarily a bad situation.”
“A bankruptcy action will bring many issues to a head sooner than a state court,” he said.
Garabedian, who said he’s actively involved in bankruptcy proceedings involving dioceses in Rochester, New York; Buffalo, New York; and Rockville Centre, Long Island, said bankruptcy filings will “not leave church abuse victims out in the cold.”
“In some cases it will empower them more,” he said.
The Diocese of Norwich said it’s the 31st Catholic religious organization in the U.S. to seek bankruptcy protection under Chapter 11. Three of the bankruptcies were filed by religious orders and 28 by dioceses or archdioceses.
As of May 2021, 19 of the earliest bankruptcies have concluded with a successful reorganization and 11 of the more recently filed reorganizations are pending, the Norwich Diocese said.
“The archdioceses, dioceses and religious orders whose bankruptcies have concluded generally report the Chapter 11 process was instrumental to their financial recovery and current organizational stability,” the diocese said.
Reardon said that although the parishes and Norwich Diocese schools are not filing for bankruptcy, they could seek injunctions blocking lawsuits. If they want that protection, however, the schools and parishes could be required by the court to contribute to the settlement, she said.
Her clients are concerned about how much time a bankruptcy filing may require until settlement, but they’ve waited for decades and are patient, Reardon said.
“These are tough men who have been through a lot in their lives and will stick it out as long as it takes,” she said.
Stephen Singer can be reached at firstname.lastname@example.org.
Stephen Singer is a business reporter for The Hartford Courant. He was previously a business writer for The Associated Press in Hartford, covering manufacturing, the Connecticut economy, energy issues in the state and New England and other beats. Before coming to Hartford, he was a business and state legislative reporter in Charleston, W.Va.