Archdiocese of New York Pledges $300M to Mediate Clergy Sex Abuse Claims

The Archdiocese of New York announced it is establishing a $300 million fund that it intends to use to pay for a global settlement of most of the 1,300 lawsuits it still faces from victims of clergy sexual abuse.

The announcement of the fund came in a letter from Cardinal Timothy Dolan on December 8 in which he also revealed that the victims-survivors committee has agreed to engage a mediator, retired Judge Daniel J. Buckley, to negotiate a global settlement. Buckley helped negotiate a global settlement with the Archdiocese of Los Angeles and more than 1,000 victim-survivors, according to Dolan.

Dolan said the Roman Catholic archdiocese has “made a series of very difficult financial decisions,” including laying off staff, reducing its operating budget by 10%, and finalizing the sale of significant real estate assets, including the sale of the former archdiocesan headquarters on First Avenue in Manhattan earlier this year.

When completed, these transactions should net a total of more than $300 million in funds that can be set aside to provide compensation to survivors of sexual abuse, Dolan wrote.

“Our goal has always been, and continues to be, to resolve expeditiously all meritorious claims, provide the maximum amount of compensation to the greatest number of victim-survivors, and help them heal and move forward,” Dolan stated.

The church has also retained Proskauer Rose LLP and FTI Consulting as legal and financial advisors in the process.

Building Sale

Vanbarton Group, a privately owned real estate developer, said it acquired 1011 First Avenue for $103,000,000. The 20-story, nearly 400,000 square foot property has been the headquarters for the archdiocese since 1973 and was known as the Cardinal Terrence Cooke Center. Vanbarton plans to convert the building into a 26-story, 420-unit luxury residential property, which includes 105 affordable housing units, nearly 8,000 square feet of retail at the base, and over 55,000 square feet of amenities.

The global settlement approach follows a prior compensation program begun in 2016 that led to $65 million being paid to 323 abuse victims by 2019. That process was managed by Kenneth Feinberg.

The archdiocese began being flooded with additional complaints after New York enacted the Child Victims Act (VCA) in 2019 and the Adult Survivors Act in 2022, giving individuals with time-barred claims alleging sexual abuse more time to bring claims.

Jeff Anderson, an attorney for 300 claimants, told Reuters that the archdiocese agreed to negotiate settlements over the next few months to avoid trials that are slated to begin next year.

Insurer Stance

The archdiocese has been frustrated in its attempts to have its insurance carrier Chubb pay for claims. “Despite accepting millions in premiums from the archdiocese, Chubb has steadfastly refused to honor the policies it issued,” Dolan charged in his letter..

Chubb insurers have maintained that the alleged incidents of sex abuse do not trigger coverage because they were not accidents or occurrences caused by negligence but were instead the result of intentional, known or expected occurrences and thus fall outside of their policies. The Chubb insurers also allege that coverage is not available because the church has not cooperated with them in their efforts to assess the claims.

Chubb insurers have cited media reports, admissions by church leaders, investigations by 20 state attorneys general, and the underlying lawsuits themselves as evidence that the church “knew about the sexual abuse of minors, failed to stop it, covered it up, and then lied about it.”

A state appeals court sided with Chubb in April 2024.

Chubb and its affiliates issued more than 30 primary and excess general liability policies to the archdiocese from 1956 to 2003. Chubb has been defending the archdiocese in the VCA lawsuits under a full reservation of rights.

“I once again ask forgiveness for the failing of those who betrayed the trust placed in them by failing to provide for the safety of our young people,” Dolan said in his letter.

Dolan took the opportunity to report that Immaculate Heart of Mary Parish in Scarsdale, one of the parishes in the archdiocese most often named in sex abuse cases, has declared bankruptcy.

Father Stephen Ries, Immaculate Heart’s pastor, in a letter to his parishioners, said the parish “took this unfortunate but necessary step given the large number of cases arising from the Child Victims Act that allege sexual abuse by a now deceased former lay employee at our parish.”

The parish filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Father Ries said that the parish has no plans to close and will maintain its full schedule of masses, parish ministries, programs, and activities.

Topics Claims New York