CV NEWS FEED // The Diocese of Rochester, New York, is facing additional delays in its Chapter 11 bankruptcy case due to a requested postponement of a key hearing for plan revisions and ongoing complications with insurance companies.
The parties are requesting the postponement to an unspecified date to allow the Diocese and the committee time to revise their plan in light of the U.S. Supreme Court’s June 27 ruling on the Purdue Pharma bankruptcy, the Rochester Beacon reports. The planned revisions could delay the conclusion of the already five-year-old case.
As reported earlier by CatholicVote, the Supreme Court ruled 5-4 in June that the bankruptcy court did not have the authority to release Sackler family members of Purdue Pharma from legal claims by opioid victims. This ruling affected the Syracuse diocese’s plan to allocate over $100 million to sexual abuse survivors in exchange for waiving additional legal claims.
The Diocese had originally planned to contribute half of the fund to the 400 victims of sexual abuse in the diocese, with the rest covered by parishes, schools, missions, Catholic Charities, and additional funds from insurance.
The Supreme Court ruling complicates the case by preventing bankruptcy court judges from shielding non-bankrupt entities, such as the diocese’s parishes, from liability, the report shared.
As CatholicVote previously reported, survivors gave overwhelming approval to the diocese’s plan in a vote this year, while simultaneously rejecting a rival plan Continental Insurance (CNA) proposed.
CNA, the only insurer not agreeing with the Diocese’s plan, was not able to reach a deal with the survivors’ committee, which rejected its offer to add $63.5 million to the compensation fund, the Rochester Beacon reported. CNA also proposed a similar plan, with a $75 million contribution and release from future liability, was also rejected. Survivors’ committee attorney Ilan Scharf described both of CNA’s offers as unacceptably insufficient compared with what other insurers are willing to pay for each survivor. With legal fees already totaling $14 million, the Diocese of Rochester now faces an additional claim from CNA alleging a breach of contract over the $63.5 million settlement offer. The diocese denied that any contract was concluded.
