The Rochester Catholic Diocese expects Child Victims Act sex-abuse claims to outstrip its entire stated assets by nearly $50 million.
In papers filed Oct. 4, the diocese stated total assets of some $67 million against liabilities of $113.1 million. An estimated $90 million in anticipated sex-abuse claims accounts of almost all of the diocese’s liabilities.
The $90 million in expected new claims would come on top of the estimated $1.9 million the diocese has already agreed to pay 19 claimants with whom it settled sex-abuse claims before its Sept. 12 Chapter 11 plea for court protection from creditors.
The Oct. 4 filing comes roughly a week in advance of the diocese’s first meeting with creditors, which is slated to take place Oct. 10. In September, the U.S. Trustee named a committee whose nine members include church-related sex-abuse survivors to look out for creditors’ interests.
In Chapter 11 cases, debtors like the Rochester diocese aim to pay creditors at least some of what they are owed but leave enough to keep their own operations going.
How that aim will play against the $90 million in expected new sex-abuse claims against the diocese will present the Bankruptcy Court with a host of thorny issues to wade through.
What kind of cash payout abuse survivors might get in the Rochester diocese bankruptcy remains to be seen as does whether the 19 payouts, of $100,000 each, the diocese had previously agreed to make could be thrown into the mix and possibly reduced.
“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 the Diocesan authorities when addressing that misconduct,” stated Rochester diocese chancellor Rev. Daniel Condon in a September court filing. “The Diocese does not seek bankruptcy relief to hide the truth or deny any person a day in court. In fact, the Diocese is committed to pursuing the truth and has never prohibited any person from telling his or her story or speaking his or her truth in public.”
Still, as portrayed by the diocese at the case’s outset, the Catholic organization’s finances would seem to pose daunting barriers to its immediately paying out anything close to the $90 million in sex-abuse claims it expects to be hit with.
The diocese’s filing last week states roughly $63 million of its assets to be in cash with some $57 million of that amount in restricted fund accounts that are marked for specific charitable purposes.
In a previous filing, the Rochester diocese stated that its Lloyds of London liability insurance allows for sexual misconduct payouts of $1 million per incident but caps the aggregate sexual misconduct payout at $2 million.
Spurring the diocese’s bankruptcy filing was New York’s passage of the Child Victims Act. Signed into law in February, the law temporarily partially lifts the statute of limitations that would otherwise require filers of sex-abuse claims to do so before their 23rd birthday. The CVA extends the window to up to claimants’ 55th birthday. It sunsets in August 2020.
Less than two months into the CVA’s one-year window, the diocese in late September said it had been hit with a dozen complaints in addition to the 19 it settled before asking for court protection.
Will Astor is Rochester Beacon senior writer.