Long Island Diocese proposes $200 mln settlement of sex abuse claims

Reuters [London, England]

November 28, 2023

By Dietrich Knauth

  • Summary
  • Law Firms
  • Judge says parishes must disclose finances or “forget it”
  • Abuse claimant attorney says current plan lacks support
  • Diocese offer would be largest Catholic bankruptcy settlement

The Catholic Diocese of Rockville Centre, New York, proposed a revised $200 million settlement of sex abuse claims, but faced immediate pushback on Tuesday from a U.S. bankruptcy judge who demanded more detailed financial information from the bankrupt Long Island diocese.

The diocese said in a Tuesday statement that its revised bankruptcy plan filed Monday was its “best and final” offer. It would pay claimants $200 million in cash, plus the potential for additional recoveries from the diocese’s insurers.

U.S. Bankruptcy Judge Martin Glenn in Manhattan, who is overseeing the diocese’s Chapter 11, and attorneys for abuse survivors called the proposal a non-starter at a court hearing later Tuesday morning.

The diocese’s attempt to resolve about 600 sex abuse claims has been stalled for months, and Glenn had warned in July that he could dismiss the bankruptcy if no progress was made.

Glenn on Tuesday said he would not approve a bankruptcy plan without detailed financial information from each of the approximately 130 parishes within the diocese. Abuse claimants who vote on the plan must be able to weigh the value of their claim against the resources available to the parish where their abuse occurred, Glenn said.

“Aggregate financial information for parishes isn’t going to cut it,” Glenn said. “If the parishes aren’t going to provide that information, forget it.”

James Stang, who represents the official committee of abuse victims in the case, said Tuesday that claimants would not vote for the current plan, which would expunge legal claims against all of the parishes.

Corinne Ball, an attorney for the diocese, said that her client had “some homework to do,” after hearing Glenn’s comments about the parish finances.

Under Monday’s proposal, the diocese would provide $50 million in cash to pay abuse claimants, with another $150 million contributed by its parishes and other Catholic organizations.

The proposed payout would be the largest settlement offer ever made in a Catholic diocese bankruptcy, both on a total payout and per claimant basis, according to Rockville Centre.

The diocese filed for Chapter 11 bankruptcy in October 2020, citing the cost of lawsuits filed by childhood victims of clergy sexual abuse. New York’s Child Victims Act, which took effect in August 2020, temporarily enabled victims of child sexual abuse to file lawsuits over decades-old crimes. At least 20 other dioceses have filed for bankruptcy in response to New York’s law and similar laws passed in other U.S. states.

The case is In re The Roman Catholic Diocese of Rockville Centre, New York, U.S. Bankruptcy Court for the Southern District of New York, No. 20-12345.

For Rockville Centre: Corinne Ball and Todd Geremia of Jones Day

For the creditors committee: James Stang of Pachulski Stang Ziehl & Jones

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