By Dietrich Knauth
NEW YORK (Reuters) – A Roman Catholic diocese in Long Island, New York, announced a new bankruptcy settlement on Thursday that would pay more than $323 million to about 530 sexual abuse survivors who alleged they were abused by priests as children.
The Roman Catholic Diocese of Rockville Centre, which serves about 1.2 million Catholics in Nassau and Suffolk counties, said earlier this year that it did not think a bankruptcy settlement would be possible after abuse survivors rejected the diocese’s earlier settlement offer. value of $200 million.
U.S. Bankruptcy Judge Martin Glenn in Manhattan, who is overseeing the case, said the deal represented “tremendous progress” after the bankruptcy came “within a hair’s breadth” of failure.
Rockville Center will contribute $234.8 million to a settlement fund, with four insurers contributing $85.3 million. The settlement will also be funded by another insurer being liquidated in separate insolvency proceedings and by lawyers representing abuse survivors.
Diocese spokesman the Rev. Eric Fasano said the settlement has been reached
would ensure “fair compensation for abuse survivors while allowing the Church to continue its essential mission.”
The diocese filed for bankruptcy in New York in October 2020, citing the costs of lawsuits filed by youth victims of clergy sex abuse.
More than two dozen Catholic dioceses have filed for bankruptcy in recent years after New York and other states passed laws temporarily allowing victims of child sex abuse to file lawsuits over decades-old crimes.
Thursday’s settlement could provide a new path forward for dozens of Catholic dioceses that have filed for bankruptcy to address sex abuse claims.
Dioceses previously relied on the ability of bankruptcy courts to grant sweeping legal protections to non-bankrupt entities that contributed to settlement funds, a practice that the U.S. Supreme Court struck down this year.
That ruling, in the bankruptcy of OxyContin maker Purdue Pharma, forced the bankrupt dioceses to come up with new ways to boost settlement contributions from insurers and parishes, which had contributed money to the dioceses’ settlement plans in previous Catholic bankruptcies to secure a settlement. to end their exposure to sex. abuse lawsuits.
Rockville Center solved that problem by first agreeing to have all of its parishes file for bankruptcy, where they could receive legal protection in exchange for subjecting their assets and liabilities to court oversight, said attorney Corinne Ball (NYSE:) of the diocese in court. The insurers then agreed to buy back their policies from the diocese and parishes, ending their responsibility for covering sexual abuse claims.
