NORWICH (CT)
Norwich Bulletin [Norwich CT]
July 15, 2021
By John Penney
The Roman Catholic Diocese of Norwich on Thursday filed for bankruptcy reorganization as part of its efforts to resolve several pending abuse lawsuits initiated by individuals who allege they were sexually assaulted by at least two overseers of a former Deep River boarding school during the 1990s.
In a letter posted on the diocese’s website, the Most Rev. Michael Cote, bishop of Norwich, said the Chapter 11 filing, though the U.S. Bankruptcy Court in Hartford, was the “most equitable way” to deal with the dozens of lawsuits filed alleging abuse at The Academy at Mount Saint John.
“It is with a heavy heart, and out of deep concern for the Diocese and you the faithful, that I regrettably share with you the following information, which is probably the most important news that I have had to deliver in my 18 years as the shepherd of the Diocese of Norwich,” Cote said on the diocese website announcing the voluntary bankruptcy petition filing, a decision he said was reached after two years of “careful deliberation and prayer.”
Cote said nearly 60 former residents have filed suit for damages “that exceed the Diocese’s current financial ability to pay.”
“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,” Cote said in his letter. “If the Diocese had not filed for bankruptcy, it would be unable to ensure that all of the individuals who file claims are treated fairly and have equal access to the funds available.”
What does the bankruptcy filing mean for Norwich diocese churches?
Cote said weekly and monthly offertory gifts collected at parishes will continue to be used strictly to fund those institutions, though he said the diocese will have “fewer financial resources to help schools and parishes” because of the filing.
Cote said diocese financial and legal advisors are “maximizing the availability of insurance coverage, real estate assets, and investment proceeds” to handle potential settlements.
Cote noted previously-settled abuse by the diocese “greatly depleted our financial assets leaving us with fewer resources and coverage to be able to defend or settle abuse cases.”
Who is accused of sexual about at The Academy at Mount Saint John?
The majority of the ongoing sexual abuse allegations are directed at Brother Paul McGlade and music teacher Brother Pascal Alford, both dead, though two other staff members are named in at least one other suit. The suits claim individuals were between 10-15 years old when victimized between 1986 and 2000 while they attended the academy, which then served as a residential boarding school.
McGlade has also been accused of sexually assaulting young boys in Australia before being transferred to Norwich and appointed the academy’s executive director by former Bishop Daniel Reilly and others, a lawsuit alleges.
Minors at the time of the alleged abuse were frequently referred to the academy by the state Department of Children and Families and juvenile court judges. The facility was later restructured as the Connecticut Transition Academy and still overseen by the diocese, but has since closed.
What does the bankruptcy filing change?
Diocese officials said parishes, cemetery corporations, Catholic schools and religious orders that fall under the group’s auspices are not included in the bankruptcy flings and the direct day-today operations of those entities – including employment, salaries and benefits earned by employees or retirees – are not expected to be affected by the planned reorganization.
The filing pauses all civil actions, judgments, collection activities and other legal actions. Court officials will set a deadline for plaintiffs to file financial claims against the diocese – the full extent of the diocese’s liabilities will not be known until the claim deadline passes, diocese officials said.
The diocese, which includes the counties of Middlesex, New London, Tolland and Windham in Connecticut and Fishers Island, within Suffolk County, New York, will “negotiate in good faith” to reach settlements with the abuse victims and approved creditors while preparing a financial reorganization plan that includes all obligations, who will be paid and in what amounts and when the diocese expects to emerge from bankruptcy.
Under Chapter 11 rules, such reorganization plans are submitted to court officials and are voted on by creditors – in this case individuals who filed abuse claims – before being implemented.
“The Diocese is dedicated to working diligently with abuse survivors, creditors and its ministries to maintain open communication and full transparency as we work toward a comprehensive resolution of all claims and a more secure financial future under Bankruptcy Court protection,” Cote said. “We look forward to emerging from the reorganization process as a stronger diocese committed to demonstrating Christ’s spirit of humility, charity, compassion, sensitivity and courage in our ministries.”
How many Catholic churches have filed for bankruptcy?
Cote said the Norwich diocese is the 31st and most recent Catholic organization to seek bankruptcy protection. He said three of the bankruptcies were filed by religious orders and 28 by dioceses or archdioceses.
As of May, 19 of the earliest bankruptcies have concluded with a successful reorganization and 11 of the more recently filed reorganizations are pending, Cote said.
According to the Chapter 11 petition, the diocese has between 50-99 creditors and estimated assets of between $10 million and $50 million. Diocesan liabilities were pegged at between $50 million and $100 million.
John Penney can be reached at jpenney@norwichbulletin.com or at (860) 857-6965