The Catholic Diocese of Rochester, its insurers, and survivors of clergy sexual abuse have agreed on a $246 million fund to pay abuse claims as part of the diocese’s Chapter 11 plan to emerge from bankruptcy.
The plan came together last week when the last holdout among the insurers, Continental Insurance Co. (CNA), agreed to contribute $120 million.
The western New York diocese and its parishes are contributing $55 million to the claims fund. The rest will come from insurers. In addition to the $120 million from CNA, the fund will include $19.5 million from London Market Insurers (LMI), $1.1 million from LMI Underwriters, $50 million from Interstate and $750,000 from First State.
Payments to the fund will go to resolve an estimated 470 sex abuse claims filed against the diocese.
The 300,000-member diocese declared bankruptcy in 2019 when hundreds of lawsuits were filed against it after the state enacted the Child Victims Act, which exposed the church to claims of abuse that occurred many years ago, some decades ago.
After turning to insurers for coverage and getting hundreds of denials from Continental and letters of reservation from other carriers, the diocese sued the insurers in late 2019 seeking a declaration of the rights, duties, and liabilities of the parties. Years of court-ordered mediation followed, with the result being more than $190 million from the insurers.
Rochester Diocese Claims Fund Reaches $126M as 2 More Insurers Settle, 1 Holds Out
The committee for survivors supported the final plan after the Continental contribution. Citing the “unprecedented” vote of support for the plan by survivors, U.S. Bankruptcy Judge Paul Warren indicated he will formally approve the agreement at a hearing on September 5.
According to court documents, the diocese and survivors had rejected earlier CNA offers of $63 million and $75 million and CNA had rejected a diocese proposal of $171 million. The diocese and survivors were prepared to proceed with a plan allocating funds to claims settlements without CNA’s involvement and accept the risk of pursuing later recovery from CNA. But on July 22, the parties agreed to the $120 million figure.
On July 26, Bishop Salvatore R. Matano in his account of negotiations with survivors and mediation with insurers noted that the objectives have been to resolve abuse claims in a “fair and equitable manner” and position the diocese, the parishes and affiliates to continue their religious and charitable missions. “The Diocese acknowledges its moral obligation to compensate all survivors of Abuse by Church personnel fairly and equitably,” he wrote. “Given its limited resources. including limited insurance coverage. I understood that a race to the courthouse would not allow for fair and equitable compensation of all survivors of Abuse.”
The Rochester diocese serves the counties of Monroe, Wayne, Yates, Ontario, Cayuga, Seneca, Tompkins, Tioga, Chemung. Schuyler. Livingston. and Steuben.
The Rochester diocese is not alone in seeking protection from sexual abuse claims following enactment of the Child Victims Act. Catholic dioceses in Buffalo, Syracuse Albany, and Rockville Centre have also resorted to bankruptcy.
Topics Claims
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