Buffalo diocese files for bankruptcy protection over hundreds of child sex abuse claims

ROCHESTER, N.Y. – The Diocese of Buffalo, New York filed for bankruptcy protection Friday, becoming the 21st U.S. Catholic diocese to turn to the court system as they and Roman Catholic organizations nationwide struggle with a barrage of sexual abuse allegations.

The long-expected filing cited New York's Child Victims Act, a one-year reprieve that extends the normal statute of limitations and allows sexual abuse survivors to file lawsuits over misconduct that allegedly occurred years or even decades ago.

A statement on the diocese's website said the decision to pursue a Chapter 11 reorganization in bankruptcy court was necessary "to continue uninterrupted its mission throughout Western New York while working to settle claims with existing diocesan assets and insurance coverage."

"The diocese does not seek Chapter 11 relief to shirk or avoid responsibility for any past misconduct by clergy or for any decisions made by diocesan authorities when addressing that misconduct," said Charles Mendoza, the diocese's executive director of financial administration, in an affidavit filed with the court petition.

"In fact, the diocese is committed to pursuing the truth and has never prohibited any person from telling his/her story or speaking his/her truth in public," added Mendoza.

However, the Survivors Network of those Abused by Priests, an organization of sexual abuse survivors and their supporters, argued in a website post that the bankruptcy filing "is a move designed less to protect assets and more to protect secrets and prevent the public from getting the full truth about the scope of clergy abuse within its borders."

"Bankruptcy freezes the discovery of plaintiffs suing it, and in so doing, limits the damage of testimony under oath and the obligation of defendants to honestly answer written questions," SNAP's statement said. "In short, by declaring bankruptcy, church officials in Buffalo can refuse to take responsibility for abuse and cover-ups that occurred under their watch."

The filing followed a similar bankruptcy petition filed in September 2019 by the adjoining Rochester Diocese. Together, the two dioceses minister to an estimated 900,000 Catholics across much of northern New York state.

The court petition also came days after the Boy Scouts of America filed for bankruptcy court protection as the youth organization tries to deal with a similar avalanche of sexual abuse allegations.

Friday's petition in the U.S. Bankruptcy Court for the Western District of New York was signed by the Most Rev. Edward Scharfenberger, the Bishop of Albany. He was named the Buffalo diocese's apostolic administrator after Bishop Richard Malone resigned in December under fire from sexual abuse survivors and parishioners.

"We have no more urgent work than to bring about justice and healing for those harmed by the scourge of sexual abuse," Scharfenberger said in the statement on the diocese's website.

The bulk of the liabilities listed in the petition are judgments the diocese expects to pay for alleged child sexual abuse claims filed against its priests, nuns, brothers and deacons. Nineteen of the largest 20 creditors listed in the filing are unidentified victims of alleged sexual abuse who have sued the diocese.

The petition assigned an unsecured claim amount of $100,000 to each of those cases. The 19 victims serve as representatives of the much larger pool of alleged sex-abuse victims whose claims for damages will become part of the bankruptcy case.

In all, the court filing seeks bankruptcy protection from an estimated 200 to 999 creditors. The petition also estimates the Buffalo diocese has liabilities ranging from $50 million to $100 million.

Once a Chapter 11 reorganization petition is filed, all Child Victims Act lawsuits are moved to the bankruptcy proceeding, and any additional claims must be filed there.

More than 300 claims have been filed against the Buffalo diocese under the Child Victims Act since Aug. 14, according to a compilation by the Democrat and Chronicle. That total is the highest among similar lawsuits filed against any of New York's eight Catholic dioceses.

Abuse cases could take years to resolve: Child sexual abuse survivors deal with bankruptcy, old evidence after laws extend statute of limitations

The dioceses across the U.S. that have sought bankruptcy court protection will use the legal process to manage sexual abuse claims and arrange compensation for victims, pay other creditors what they can, and preserve enough assets to maintain day-to-day operations.

During the course of the proceedings, which could well last for several years, the dioceses and its creditors will try to identify as many assets as possible to pay claimants. Companies that provided insurance to the dioceses are expected to be asked to cover significant contributions.

Lawyers have said that other dioceses that went through bankruptcy reorganization were financially stressed, but all of them were able to continue their ministry as before after the proceeding is concluded.

Follow Steve Orr on Twitter: @SORR1

This article originally appeared on Democrat and Chronicle: Buffalo diocese files for bankruptcy protection amid 300 abuse claims