The anticipated financial impact of dozens of new clergy sex abuse cases has prompted the Syracuse Diocese to file for reorganization under Chapter 11 bankruptcy. Bishop Douglas Lucia made the announcement Friday, saying the diocese has over 100 lawsuits pending against it.
He says that number could grow if the window to file lawsuits under the state’s Child Victims Act is extended to August 2021. Lucia says without reorganization, the Diocese and claimants would face a slow, unpredictable, and costly process through multiple courts. He says the intent is to more equitably address as many cases a possible.
“The growing number of CVA lawsuits against the Diocese presents a risk that those claimants who filed suits first, or pursued their claims more aggressively would receive a much greater portion of the funds available to pay victims, leaving other claimants, potentially some who have suffered more, with little or nothing,” he said. “In order to ensure that victim claims are treated justly and equitably, I feel it is necessary to enter into Chapter 11 where available funds will be allocated fairly among all victims in accordance with the harm each suffered.”
As part of the reorganization plan, the Diocese intends to create a victims fund with a pool of funds from the Diocese and insurance carriers. Lucia wants to be clear that the action is not aimed at hindering claims by victims. In fact, he says it’s just the opposite.
“It seeks to establish a process by which claims will be treated in a just and equitable way. I know not everyone will see it in this manner, and to those whose wounds are opened again or whose faith is shaken because of these proceedings, I am truly sorry.”
Lucia insists the bankruptcy filing is in the interest of more transparency, not less, and that the Diocese is not trying to hide anything. Attorney for the Diocese Charles Sullivan says lawsuits will be heard before the bankruptcy court instead of state courts, which allows for a more coordinated, uniform process of handling the cases.
“There won’t be separate trials in each claim, but there is a full and fair opportunity for claimants to come forward, present their claims, present their proof, and be heard in bankruptcy court, just in the same way that there would be in state court,” he said. “Discovery occurs just like it does in a state court. This is about having all the claims brought before one court for fair and equitable distribution. There is no other way for the diocese to meet its obligation to provide recompense to all of these victims.”
The bankruptcy filing only affects the Diocese. Bishop Lucia says parishes, the Foundation including the Hope Appeal, Catholic Charities, Catholic schools, and other entities are separate corporations and not directly involved. Diocese Chief Financial Officer Stephen Breen says they have 158 full and part time employees, and do not intend to reduce their workforce as a result of the bankruptcy reorganization.
