Facing more than 200 lawsuits alleging sex abuse filed since New York state lifted the statute of limitations on such cases, the Diocese of Rockville Centre on Long Island Oct. 1 filed “a voluntary petition for reorganization” under Chapter 11 of the U.S. Bankruptcy Code.
The petition was filed in U.S. Bankruptcy Court for the Southern District of New York.
“We believe that this process offers the only way to ensure a fair and equitable outcome for everyone involved, including abuse survivors whose compensation settlements will be resolved by the courts,” said Bishop John O. Barres in a statement.
“This decision was not made lightly,” he said, “but, with the passage of the Child Victims Act, the failure of the diocese’s insurers to honor their contractual obligations and the number of suits filed to date, it has become clear the diocese would not able to continue its spiritual, charitable and educational missions while shouldering the increasingly heavy burden of litigation expenses associated with these cases.”
Last year, Gov. Andrew Cuomo signed the Child Victims Act to lift the statute of limitations on filing childhood sex abuse cases that previously had been “time-barred or expired.” The new law gave survivors a year to file, but Cuomo has twice extended the deadline because of difficulties posed by the ongoing pandemic, he said. The deadline is now Aug. 14, 2021.
Regarding the bankruptcy filing, “we know that this will be difficult news for people across the diocese to hear, especially for the many people of Long Island, Catholic and non-Catholic alike, who depend on the Church in so many ways,” Bishop Barres said in a 10-minute video posted on the diocese’s website, www.drvc.org.
The financial burden of litigation expenses “has been severe” and has “only been compounded” by the financial toll of Covid-19 on the diocese, the bishop said.
The bankruptcy will allow the diocese to carry out its “spiritual, charitable and educational missions,” Bishop Barres said, while at the same time “make sure all clergy sex abuse survivors are afforded just and equitable compensation” and “offer survivors some measure of healing from these horrific abuses.”
Bishop Barres, in his video message, said the diocese “believes its current and future liquidity will be sufficient to fund operations and ministries during the restructuring process and beyond.”
The news release said, “Vendors will be paid for all goods and services delivered after the filing, and transactions that occur in the ordinary course of business will continue as before. Employees will be paid their normal wages, and their benefit programs will continue uninterrupted.”
The diocese said its parishes and Catholic schools are separate legal entities and therefore are not included in the filing. “Operations of the parishes and schools are expected to continue as normal,” it said.
Some parishes are named in Child Victims Act lawsuits along with the diocese, and Bishop Barres said the diocese “intends to petition the Bankruptcy Court to stay any separate civil actions against these parishes and bring these cases under the umbrella of the settlement process in the diocese’s Chapter 11 case.”
“We carefully and prayerfully considered other alternatives, but Chapter 11 was the only way to provide fair settlements to survivors while continuing to be of service to the 1.4 million Catholics in the geographical boundaries of the Diocese of Rockville Centre,” said Bishop Barres in his message.
The diocese began implementing cost reductions and streamlining its operations last October, a move expected to save the diocese about $3.5 million annually.
“Like many other institutions, the diocese has suffered a strain on its finances as a result of the Covid-19 pandemic. Approximately 40 percent of its annual revenue comes from offertory collections, which have dropped precipitously (along) with attendance at Sunday Mass,” the news release said. The Diocese of Rockville Centre encompasses Nassau and Suffolk counties on Long Island. —CNS