By Parishes in the New York diocese will also undergo a notable bankruptcy proceeding called “rapid pre-pack Chapter 11.”
The Diocese of Ogdensburg, New York, is moving to settle its long-running bankruptcy proceedings with an $83 million fund for abuse victims, Bishop Terry LaValley has announced, with a significant portion of that amount coming from insurance providers.
The bishop announced the proposed settlement in an Aug. 25 letter to the diocese. The diocese had earlier announced a $45 million agreement in May.
A diocesan spokeswoman confirmed that the additional roughly $38 million would come from insurance contributions.
In his August letter, LaValley said the diocese was hoping to have the plan approved by the bankruptcy court “in the next few months.” The Ogdensburg Diocese filed for bankruptcy in July 2023, the sixth diocese in New York state to do so.
The bishop urged Catholics to pray for both abuse victims as well as the diocese itself. He described the reparation payments as a “moral obligation” on the part of the diocese.
‘Rapid pre-pack’ bankruptcy
In his letter, LaValley said the parishes in the diocese will undergo a notable bankruptcy proceeding called “rapid pre-pack Chapter 11,” one that will settle current abuse allegations while protecting parishes from future litigation.
“Each of our parishes will file a Chapter 11 case at the very last moment, after we know whether we have sufficient votes to confirm the plan,” the bishop said. Parishes are anticipated to be in bankruptcy for about 48 hours before emerging “quickly,” he said.
“The result is that the diocese and parishes will receive a bankruptcy discharge of all alleged abuse claims as of the date the parishʼs pre-packed bankruptcy is filed,” the bishop said. “Going forward, no abuse claims may be brought against parishes from prior to that date.”
The bishop said the unique strategy emerged after a June 2024 Supreme Court decision on bankruptcy, likely a reference to the U.S. Supreme Court’s ruling that month in Harrington v. Purdue Pharma L.P.
That ruling on a complex provision of U.S. bankruptcy law meant that individual parishes and schools in diocesan abuse proceedings could be sued, greatly expanding the possibility of large numbers of expensive lawsuits against Catholic entities.
LaValley said the diocese had been advised that the “rapid” bankruptcy proceeding “is the only viable and realistic way to obtain comprehensive relief” for all diocesan entities there.
A similar strategy had been used in the Diocese of Rockville Centre, New York, and the Archdiocese of New Orleans, he said.
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And this is the cost of not thoroughly vetting candidates to the priesthood to insure that no homosexuals are permitted ordination.
I found this. This is horrible, notice NO PRIEST HAS BEEN SENT TO JAIL; OTHERS JUST REASSIGNED, AND ONE WAS RE-HIRED etc.:
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• “OF THE 52 PRIESTS PUBLICLY ACCUSED by the diocese, THE OVERWHELMING MAJORITY WERE NEVER CRIMINALLY CHARGED AT ALL — THEY WERE REMOVED FROM MINISTRY, REASSIGNED, ALLOWED TO RETIRE, OR SIMPLY DIED BEFORE ANY LEGAL ACTION WAS TAKEN.
• The two priests from the Diocese of Ogdensburg who were convicted of crimes
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• — Carl Stone (1981, SODOMY OF TWO TEENAGE BROTHERS) and John Fallon (1985, child pornography) — BOTH RECEIVED PROBATION, NOT PRISON SENTENCES.
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• Stone was placed on probation and THEN, SHOCKINGLY, WAS HIRED BY ANOTHER BISHOP IN CANADA WHILE STILL ON IT. FALLON GOT FIVE YEARS OF PROBATION AND PSYCHIATRIC THERAPY.
• So as far as the public record shows, NO PRIEST FROM THE DIOCESE OF OGDENSBURG HAS SERVED TIME IN JAIL OR PRISON FOR ABUSE. The civil settlement, while important for survivors’ compensation, does not and cannot substitute for criminal accountability that was never pursued.
“Criminal and Ecclesiastical Consequences:
• Criminal Guilt: At least one priest, John Fallon, pleaded guilty to distributing child pornography in December 1985 and was sentenced to five years of probation.
• Another priest, Carl Stone, WAS CONVICTED OF SODOMIZING TWO TEENAGE BROTHERS IN 1981 AND WAS REMOVED FROM MINISTRY.
• Church Discipline: The Diocese has removed accused priests from ministry. In 2002, half of the publicly known perpetrators were removed following a zero-tolerance policy. HOWEVER, SURVIVORS AND ADVOCATES HAVE TESTIFIED THAT MANY ACCUSED PRIESTS WERE REASSIGNED TO OTHER PARISHES OR ALLOWED TO RETIRE WITHOUT BEING CHARGED WITH A CRIME OR TAKEN TO COURT FOR DECADES”.
• “The $45 million settlement agreed to by the Diocese of Ogdensburg in 2026 is designed to resolve approximately 125 civil claims filed by survivors through the diocese’s Chapter 11 bankruptcy reorganization.
• Civil vs. Criminal: This settlement is a civil financial resolution between the diocese and the victims; IT DOES NOT RESULT IN CRIMINAL CONVICTIONS OR ADDITIONAL ECCLESIASTICAL PUNISHMENT FOR THE INDIVIDUAL PRIESTS.
• No Admission of Liability: Such settlements typically allow the institution to manage debt and provide compensation to survivors WITHOUT ADMITTING LEGAL LIABILITY FOR THE INDIVIDUAL ACTS, MEANING THE PRIESTS THEMSELVES ARE NOT “PUNISHED” BY THE SETTLEMENT TERMS BEYOND THE POTENTIAL LOSS OF THEIR POSITIONS IF THEY ARE STILL ACTIVE.
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