Some abuse victims dissatisfied by Rochester diocese’s bankruptcy plan

Rochester, N.Y., Jul 7, 2021 / 19:01 pm (CNA).

A proposed settlement deal between the Diocese of Rochester and several insurance agencies has drawn criticism from a group of abuse victims, whose lawyer says the settlement would not cover enough of the lawsuits that the diocese faces.

The Rochester diocese, which filed for bankruptcy in September 2019, has been negotiating with victims of sex abuse during the bankruptcy proceedings on a judge’s orders. More than 475 abuse claims have been filed against the diocese.

A proposed settlement, which the diocese announced June 11, involves a $35 million agreement with the major insurers involved in the bankruptcy case.

The settlement would cover “only a portion” of the abuse claims against the diocese, with the rest coming from a yet-to-be-established “Survivors Fund,” the diocese said.

“We believe this settlement, if approved, is a significant step forward in our goal of achieving a fair and equitable Reorganization Plan – the vast majority of which will be funded by our insurers – that will compensate the survivors of sexual abuse who have filed claims in our Chapter 11 case,” a diocesan statement reads.

Some victims claimed that the diocese is intentionally prolonging the talks and pushing off a solution, while the diocese has responded that it is acting in good faith in the proceedings.

A lawyer for the unsecured creditors committee, which is tasked with greenlighting the debtor’s plan before the judge approves it, said he believes the $35 million settlement from the insurance companies is not enough. The creditor’s committee includes 12 abuse victims, the Rochester Beacon reported.

The committee’s lawyer, Ilan Scharf, said he believes the diocese, even if it liquidates assets, will not be able to pay the remaining amount sought by victims for abuse claims after the $35 million is used up. Scharf says he plans to file an official objection to the settlement deal.

A hearing on the proposed settlement has been scheduled for July 9.

New York’s 2019 Child Victims Act created a one-year “lookback” window where alleged abuse victims could file lawsuits long after their statute of limitations had ended, leading to a flood of filings. The window will be open until Aug. 14, 2021.

Four of New York’s dioceses— Rochester, Syracuse, Buffalo, and Rockville Centre — have declared bankruptcy amid the lawsuits brought under the Child Victims Act.