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Deadline to File Childhood Sex Abuse Claims Against Diocese of Syracuse is Set
Saunders and Walker
(800) 748-7115

Chief Judge Margaret Cangilos-Ruiz of the U.S. Bankruptcy Court Northern District of New York stated that survivors of child sexual abuse within the Diocese of Syracuse will have until April 15, 2021 to file claims against the Diocese.

The Diocese of Syracuse filed for bankruptcy protection in June 2020 after dozens of abuse survivors filed abuse lawsuits against the Diocese.  The bankruptcy filings show the diocese has assets of more than $10 million but less than $50 million. Lawyers for the diocese from Syracuse firm Bond, Schoeneck & King estimated the diocese has between 100 and 200 creditors and up to $100 million in liabilities.

The filings also revealed the diocese received a $1.3 million federal Paycheck Protection Program loan to help cover expenses during the coronavirus pandemic.

The Diocese of Syracuse, along with the Dioceses of Buffalo, Rochester, and Rockville Centre sought bankruptcy protection after the Child Victims’ Act was extended for another year due to the COVID-19 pandemic.  The bankruptcy filings provide the beleaguered dioceses an opportunity to re-structure but more importantly it shields them from potentially thousands of abuse lawsuits that would have most certainly revealed the nature and extent of the cover-up and corruption that underlies the priest abuse crisis.

More than 20 Catholic dioceses have filed for bankruptcy over the past 16 years, according to BishopAccountability.org, which tracks sexual abuse cases in the church. The Rockville Centre diocese, the eighth largest in the country by population, is believed to be the biggest to do so.

Now that the abuse lawsuits have been frozen in these dioceses, the claims are transferred to bankruptcy court where the focus will be on the financial assets and liabilities of the individual dioceses rather than their history of malfeasance.

However, a Bloomberg News article from January 2020 calls into question the church’s bankruptcy strategy.

“In many cases, churches precede bankruptcy by transferring and reclassifying assets. The effect is to shrink the pot of money available to clergy abuse victims. That and Chapter 11’s universal settle­ments and protections from further claims have been an effective one-two punch for limiting payouts. A Bloomberg Businessweek review of court filings by lawyers for churches and victims in the past 15 years shows that the U.S. Catholic Church has shielded more than $2 billion in assets from abuse victims in bankruptcies using these methods. “The survivors should have gotten that money, and they didn’t,” says Terry McKiernan, president of BishopAccountability.org. “The Catholic Church has behaved like a business. It hasn’t behaved like a religion that lives by the rules it espouses.”

The Bloomberg article not only reported what is happening but how church officials have manipulated their accounting to the church’s advantage.

“The Chapter 11 filing of the archdiocese in Santa Fe shows how easy and routine it is to rejigger a balance sheet.

The archdiocese was facing a few dozen clergy abuse suits when it filed in December 2018, saying it was too poor to defend itself. The number rose to about 375 by the June 2019 deadline that the bankruptcy court had set for victims to file claims. New Mexico doesn’t have a window statute.

In court papers, the archdiocese reported owning $49 million in real estate, cash, and investments. That figure included its Albuquerque headquarters, corporate and municipal bonds, a half-dozen cars and pickup trucks, and an unspecified amount of gold and silver. By contrast, the church’s 1951 incorporation papers put its estimated value at $40 million, or $396 million in today’s dollars.

To arrive at that $49 million figure, church leaders said at least $178 million in cash and property associated with the archdiocese was owned by parishes or held in a trust or foundation and thus wasn’t eligible for inclusion in the estate. Lawyers for victims, saying there’s no real separation between the archdiocese and its parishes, argue that the $178 million should be included in the available funds. That would raise the value of the estate to as much as $227 million.”

For more information go to our law firm web page below.

 

The Clergy Sexual Abuse Crisis

 

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