CV NEWS FEED // A bankruptcy judge has declined to reject a $63.5 million deal between an insurance company for the Catholic Diocese of Rochester, NY, and the abuse victims of the official committee of unsecured creditors.
Bankruptcy Judge Paul Warren denied on December 8 the committee’s request to terminate the multi-million dollar deal with the Continental Insurance Company.
Reaching a resolution for the Rochester diocese to pay the victims in the abuse settlement has taken more than four years, and this latest action has protracted the negotiations further.
Approximately 485 victims of abuse have filed against the diocese since 2019.
The main difficulty with reaching an agreement between the parties is determining how much each party, the insurance company and the diocese, would pay in compensation to the abuse survivors.
“Led by Continental, some insurers balked at payouts they might be called on to make,” reported local news outlet the Rochester Beacon. “Warren ordered the diocese, insurers and the committee, a body appointed by the U.S. Trustee to look out for the interests of sexual abuse survivors who are creditors in the diocese bankruptcy, into mediation.”
Judge Warren stated in his decision to deny the committee’s request, “The committee’s transparent attempt to conflate the terms ‘settlement agreement’ and ‘settlement offer’ is unavailing. A settlement agreement is not rendered a nullity by the conveyance of a yet unaccepted superior post-settlement offer.”
A month after the New York Child Victims Act (CVA) went into effect in 2019, the Rochester diocese filed for Chapter 11 bankruptcy.
“The CVA created a temporary window for survivors of long past childhood sexual abuse to go after abusers who otherwise would be protected by a statute of limitations,” the Rochester Beacon reported:
Expecting to face payouts topping $100 million, Rochester diocese officials said they planned to see much of the burden borne by insurance companies that had written liability policies when the decades-old abuses occurred.
At the bankruptcy’s start, Bishop Salvatore Matano of the Rochester diocese told parishioners their contributions to church coffers would not go toward a settlement. In the end, he relented, with apologies to parishioners; the bishop agreed to a plan in which parishes would contribute more than $10 million…
Over the course of talks, insurers and the diocese announced three settlement plans that the survivors committee rejected.
The complex situation for the diocese and the abuse victims continue, the Rochester Beacon concluded:
As the parties continue to wrangle and survivors await compensation, expenses continue to mount. As of Oct. 31, the diocese has paid out $12.5 million in monthly draws to lawyers, accountants and consultants working on the bankruptcy.
