Diocese of Rochester bankruptcy: Whistleblower and lawyers say diocese has ability to pay
Buffalo Diocese whistleblower Siobhan O’Connor says survivors’ resilience comes at a cost to the church. She spoke outside the office of the Diocese of Rochester.
Tina MacIntyre-Yee, @tyee23
The Diocese of Rochester has offered to settle its federal bankruptcy case by paying nearly $148 million to survivors of child sexual abuse.
In court documents filed Friday, the diocese asked a federal bankruptcy judge to approve a deal with its insurance companies to provide $107.25 million to settle all claims.
Under the plan, the diocese and its parishes would provide an additional $40.5 million to create a trust fund to compensate survivors of abuse.
“The diocese strongly believes that the proposed settlements are in the best interests of the survivors,” a statement from a spokesperson for the diocese said. “If the Court approves the proposed settlements, the Diocese will be able to provide a tangible benefit to survivors who have already waited too long for restitution.”
Lawyers representing about 475 abuse plaintiffs have blasted the proposal, calling it a “clandestine deal” between the diocese and its insurers.
“By not engaging survivors in the bankruptcy process and colluding with insurers, parishes and schools against survivors, the Diocese is effectively denying them a place at the table where mediation is taking place with sincere attempts to chart a path to resolution,” Jeffrey said. Anderson, whose law firm represents 175 of the plaintiffs against the Diocese of Rochester.
Anderson also argues that the diocese’s contribution to the settlement amount is only a fraction of what it is able to pay survivors.
Just two months ago, New York’s first child sexual abuse lawsuit under the Child Victims Actan Erie County jury awarded a victim of Boy Scout abuse $25 million for the harm he suffered.
The diocese’s most recent proposal would pay survivors about $311,000 each.
Jason Amala, an attorney who has represented thousands of sexual abuse survivors across the country, including in complex bankruptcy proceedings against other Catholic institutions and the Boy Scouts of America, said the proposal would leave the diocese and its insurers assume as little financial liability as possible. .
“If the diocese sincerely believes this is a good deal for the survivors, it should immediately disclose the huge sums of money and property held by the diocese and its parishes,” Amala said. “The same goes for their insurers. If the diocese wants to settle with its insurance companies, it should immediately disclose the value of its insurance policies. When people see how much these entities could pay, they will see that this proposal is an absolute abuse of the bankruptcy process.
James Marsh, whose firm has represented hundreds of victims of sexual abuse in New York under the Child Victims Act, said the plaintiffs would oppose the proposed settlement.
Learn more about the Child Victims Act: Child abuse survivors await justice and healing as CVA deadline passes with nearly 10,000 lawsuits filed
2019: Rochester-area priests and others named in child sex abuse claims
“We will fight for a new plan that properly addresses the trauma these survivors must have endured and ensures that the Diocese and its parishes are held accountable by providing fair compensation to those they injured,” Marsh said.
The diocese made a similar proposal last summer, offering to contribute $35 million to a settlement fund. This proposal was rejected by the American bankruptcy judge, Paul Warren.
On Monday, Judge Warren ruled that cases that name individual parishes as defendants could go to trial in state court.
“The diocese, insurance companies and survivors of abuse have reached a point where consensual resolution appears to be fading,” Warren wrote in her decision.
Warren also noted that three of the abuse survivors who filed claims have died since the bankruptcy process began.
“Given the age of many survivors of abuse, if they are barred from moving forward with actions against independent Catholic corporations, it is likely that others will be denied the ability to seek justice. because the sands of time are working against them,” Warren wrote. .
None of the cases filed in state court have progressed much beyond filing an initial complaint. There are probably a lot of discoveries to be made before one of the cases is
be ready for trial. It will be several months or years before any of the CVA cases are presented to a jury.
After: The Diocese of Rochester Seeks Approval of $35 Million Settlement with Insurers for Victims of Sexual Abuse
The stalled mediation process
It has been more than two and a half years since the Diocese of Rochester filed for bankruptcy protection, a decision that was prompted by the wave of lawsuits filed by survivors of child sexual abuse.
To outside observers, it appears little progress has been made in resolving the two fundamental questions at the heart of the bankruptcy case: how much money will be paid out to survivors and where will it come from?
Last July, the parties appeared before Judge Warren, asking him to intervene and complaining that the other party was unreasonable in the court-ordered mediation process. Warren chastised both sides and urged them to return to mediation and negotiate a settlement in good faith.
But the parties were back in court in late April to report that mediation efforts had again stalled, with each side asking Judge Warren to step in and resolve the impasse.
Stephen Donato, the lawyer representing the diocese argued that the problem lay with the insurance companies whose policies would pay a substantial amount of any settlement.
He told Judge Warren there was a significant difference of opinion between the carriers and the creditors’ committee, which represents about 475 abuse survivors who have filed claims.
“We are in active mediation with the carriers and with the committee, but the diocese is caught in the middle,” Donato told Judge Warren. “We are doing everything we can to bring these parties together.”
Ilan Scharf, counsel for the creditors’ committee, took a decidedly different view.
“Despite Mr. Donato’s efforts to paint the diocese as the victim here, the diocese is not caught in the middle,” Scharf argued. “They are the entity responsible for the abuse. They are the central figure who caused these problems. The survivors are the victims.”
Scharf and the other attorneys representing the abuse plaintiffs asked the judge to allow a handful of cases brought against individual parishes to go to state court, where a jury can review liability and set an amount in dollars for damages. They argued that this process would help establish baselines that could resolve the central issues of the case.
It’s the same solution the plaintiffs sought last year, which the judge denied when urging them to return to mediation.
Scharf said the fact that the parties were back in court 10 months later “belies the argument that we can arbitrate without the pressure of litigation.”
Meanwhile, legal costs keep mounting: in late April, the diocese reported that it had spent more than $6.6 million in legal and professional fees since the process began in September 2019.
Survivors decry lack of progress
For the past eight months, Carol DuPre has dressed head-to-toe in black every day
“I feel like I have to take control of something in my life,” she said. “And I look at all of this as a grieving process that we go through, because it’s not a happy thing.”
DuPre is one of hundreds of survivors who have filed lawsuits against the Diocese of Rochester alleging they were sexually abused as children by priests. She also sits on the creditors’ committee, one of the few chosen to represent the interests of all survivors in the diocese’s federal bankruptcy case.
“I mourn the loss and death of compassion on the other side of all of this. Because right there I don’t feel any compassion for us,” DuPre said. “And so it’s something that I’m in control of and it almost feels weird and strange and strange of me to do something like that, but it’s my way of remembering why I’m in this.”
DuPre’s attorney, Mitchell Garabedian, said abuse victims feel frustrated and revictimized by the lack of progress.
“You can hear the frustration in the voices of the victims caused by the delay in settlement and court proceedings and you can see it in their eyes,” Garabedian said. “Delay that the diocese and insurers are adopting in their attrition strategy. But victims will not be denied validation.”
John Bell, another member of the creditors’ committee, said the proposed settlement between the diocese and insurers was made “behind the backs” of survivors.
“Instead of working with survivors on the road to recovery, the diocese chose to work with its insurance companies,” Bell said. “The harm this causes is immeasurable and pours salt into the wounds of the survivor, but that does not stop my fight for justice and accountability.