New York’s Rockville Centre Diocese Files Chapter 11 Bankruptcy
Posted on: October 22, 2020 Catholic Church Sexual Abuse
The Rockville Centre Diocese in New York, which covers the Long Island area, and is one of the largest dioceses in the country serving 1.4 million Catholics, has filed for chapter 11 bankruptcy. The petition was filed on October 1 at the United States Bankruptcy Court for the Southern District of New York. The filing was done to help the diocese manage legal expenses and facilitate settlements with sexual abuse survivors. In a press release by the diocese of Rockville Centre, Bishop John O. Barres states, “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.”
In filing for bankruptcy, the Rockville Centre diocese becomes the fourth New York diocese to seek bankruptcy protection behind Syracuse, Buffalo, and Rochester. Even though the diocese cites the over 200 lawsuits filed since the passing of the 2019 Child Victims Act as the primary reason for seeking bankruptcy protection, its financials have taken a hit on multiple fronts. In 2017, the Rockville Centre diocese set up an Independent Reconciliation and Compensation Program (the “IRCP”) which continued up until the bankruptcy filing. The compensation program paid out over $62 million to 350 survivors. That program depleted significant financial resources ahead of the Child Victims Act being passed. More recently, the Covid-19 pandemic has affected Sunday Mass offertory collections which previously made up about 40 percent of its annual revenue. Donation amounts are down as well.
Given the financial burden, how does the Diocese of Rockville Centre plan to pay for compensation settlements? In part, the diocese will need to sell assets. What assets and the value of those assets will likely be decided by the bankruptcy court since the finances of the Rockville Centre diocese, if similar to other dioceses, may not be very clear. According to a Bloomberg Businessweek review of diocese bankruptcies, it estimates more than $2 billion dollars in current and future assets could have been reclassified, making them unavailable to put into the ‘pot’ to pay its liabilities, including compensation to clergy abuse survivors. However, lawyers for the survivors will be watching what the Rockville Centre diocese includes and excludes from its asset assessments. In addition to the actual assets, lawyers will want to make sure the assets are properly valued. This type of scenario is currently playing out in the Diocese of Buffalo bankruptcy regarding real estate value.
No matter the tactics of the Rockville Diocese, or any other diocese seeking chapter 11 bankruptcy protection, clergy abuse survivors still have rights and the ability to seek compensation from the Catholic Church.
The entire article can be viewed here.
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