Judge Approves Chapter 11 Plan for Rochester Diocese With $246M Claims Fund

A federal bankruptcy judge on Friday signed off on a $246 million fund to pay abuse claims as part of the Catholic Diocese of Rochester’s Chapter 11 reorganization plan to emerge from bankruptcy.

Having witnessed six years of bankruptcy proceedings, sexual abuse survivors in the courtroom applauded and cheered when Judge Paul Warren signed the deal. According to a local NBC report, the judge told the survivors, “The money isn’t going to fix you. I hope it gives you a sense of validation and that what happened to you wasn’t your fault.”

Rochester Diocese Bishop Salvatore Matano said it was not anticipated that the bankruptcy proceedings would last six-years. He said he expects the final steps will be completed within weeks.

“Despite this lengthy process, bankruptcy was the only means possible to assure that all survivors would be justly compensated, and the best and fairest course of action for the continued mission of the Diocese, its parishes and related entities,” Matano stated in a letter to parishioners and survivors. “Nonetheless, I am particularly conscious that these years of waiting have added to the suffering and pain of those sexually abused and whose trust was betrayed. Betrayal is a harsh word, but its effects are far more harsh. With profound sadness, I apologize to the survivors, the victims of such sinful and tragic acts for which they were not responsible. The Diocese has accepted responsibility for the damage caused by abuse.”

Insurers, the diocese. and survivors of clergy sexual abuse agreed upon the final plan in July, after the last holdout among the insurers, Continental Insurance Co. (CNA), agreed to contribute $120 million.

CNA’s $120M Contribution Finalizes Rochester Diocese Claims Fund

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.

The committee for survivors supported the final plan after the Continental contribution.

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.

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 Legislation Claims