Diocese of Camden bankruptcy plan confirmed after more than three years

The Courier-Post [Cherry Hill NJ]

March 15, 2024

By Jim Walsh

The Diocese of Camden is to pay $87.5 million to survivors of clergy sex abuse under a plan approved by a bankruptcy judge.

A trust intended to help some 300 abuse survivors will receive payments from the diocese and related entities over a five-year period, court records show.

The reorganization plan, confirmed about 3½ years after the diocese sought protection from creditors, also calls for “maintaining and enhancing the protocols for the protection of children,” Bishop Dennis Sullivan said in a statement.

He said the plan was “a just resolution for survivors, while also ensuring that the diocese is able to continue to provide its services and ministries to the people of South Jersey.”

The plan also allows for the assignment of the diocese’s insurance rights to victims, a provision “expected to yield additional millions,” said a statement from lawyers representing a creditors committee for survivors.

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Funding for the trust represents “one of the largest cash payments by any U.S. Catholic diocese in bankruptcy to date,” it noted.

Insurers’ concerns blocked earlier plan

The diocese initially agreed to an $87.5 million payment in April 2022, but the deal was delayed by opposition from insurers.

The final plan “included changes that resolved issues raised by the diocese’s insurance carriers,” said the statement on behalf of the creditors committee.

U.S. Bankruptcy Judge Jerrold N. Poslusny Jr. confirmed the plan in a March 14 order.

“We look forward to facilitating an expeditious distribution to survivors of sexual abuse, who have been, and remain, the real heroes in our battle to bring some semblance of justice for them,” said Jeffrey Prol, an Essex County attorney who served as counsel for the creditors committee.”

The plan calls for the diocese to pay about $67 million to the trust over a five-year period.

Payments of $10 million apiece are to come from another diocesan trust and from parishes, schools and missions.

“Ministry entities” are to provide $250,000.

Prol said the creditors committee was pleased with confirmation of the plan “it negotiated with the diocese and fought tirelessly to have approved.”

Sullivan expressed gratitude for Poslusny, as well as for attorneys on both sides of the dispute “for working together to reach a settlement.’

“I again express my sincere apology to all those who have been affected by sexual abuse in our diocese,” the bishop said.

The diocese sought bankruptcy protection in October 2020, citing the financial impact of the pandemic and mounting damages awarded to victims of sex abuse by clergymen.

Sullivan at that time said the diocese had paid more than $8 million to settle abuse lawsuits and was facing more than 50 others.

The suits generally claim the diocese failed to protect children from predator priests from the 1960s to the early 1990s.

The diocese, which serves about 486,000 Catholics in six South Jersey counties, implemented its protocols to better protect children in 2002.