CV NEWS FEED// Abuse survivors from the Roman Catholic Diocese of Rochester, New York, have voiced their approval for the Diocese’s plans of reorganization.
The Diocese filed for bankruptcy in 2019 after nearly 500 claims of abuse surfaced, a Portfolio Media document explains. The Diocese filed for Chapter 11 bankruptcy, allowing them to reorganize and continue operations.
Rochester Beacon reports that the Diocese proposed that it, and its 86 parishes, would contribute to a fund of $55 million to pay off the abuse survivors. In exchange, the Diocese would be released from future liability. In this plan, the settlement would total at least $127.3 million.
However, a recent U.S. Supreme Court case has made this plan untenable. In Harrington v. Purdue Pharma LLP, the Supreme Court “declared that bankruptcy judges cannot excuse so-called related third parties involved in bankruptcies from future liabilities,” the Rochester Beacon explains.
According to New York law, Catholic parishes are considered legally separate corporations from their diocese. Thus, the parishes would be considered a third party, and they couldn’t be excused from future liabilities.
The Continental Insurance Co. (CNA), which is one of the companies that insures the Diocese, proposed an alternative plan; however, it was overwhelmingly rejected by the abuse survivors. Their plan, according to abuse victims’ lawyers “mirrored the diocese plan but proposed to add a $75 million CNA contribution that would have excused CNA from future liability.”
The committee of survivors, however, rejected this settlement, and therefore the Diocese withdrew from the settlement, which CNA claims is a breach of contract.
The same committee called the $75 million contribution “paltry,” compared to the contributions of other insurers.
Now the Diocese of Rochester must face CNA’s case in bankruptcy court, as well.
