The Roman Catholic Diocese of Rochester is asking for bankruptcy court approval for its parishes to put money into a fund to settle sex-abuse claims filed in the Boy Scouts of America’s separately filed Chapter 11 bankruptcy.
What affect such a contribution might have on the diocese’s own ongoing bankruptcy is not clear.
A request submitted to the Western District of New York Bankruptcy Court’s Rochester Division by the diocese Oct. 10 asks the court to allow the Rochester diocese to opt in to a fund that would go to settle claims in the bankruptcy the BSA filed in February 2020 in Delaware.
The Rochester diocese filing does not portray its parishes’ contribution to the fund as a done deal but asks for the court’s go-ahead should it decide to opt in to the BSA fund.
“The diocese respectfully submits that it would be a sound business decision to opt
in to the BSA Plan, should the Diocese decide to do so,” the diocese’s Oct. 10 motion states.
The BSA filed its Chapter 11 petition some five months after the Rochester diocese sought court protection against its own flood of CVA claims. The Boy Scouts’ bankruptcy potentially involves the Rochester diocese in instances where claimants in the BSA case are seeking redress for abuse they allege to have suffered in Boy Scout troops sponsored by Rochester diocese churches.
The Rochester diocese bankruptcy has been in a holding pattern for several years as the diocese, a special committee representing some 400 abuse survivors and insurers that the diocese hopes will cover most the $100 million or more it expects to pay out attempt to negotiate a deal acceptable to all parties. While those talks go on, what shape such a deal might take is unknown.
While church law sees parishes as an inseparable part of each diocese, Catholic dioceses in New York, including the Rochester diocese, legally registered each of their parishes as independent corporations. Each legally independent parish corporation is headed by and answerable to its diocese’s bishop.
That legal arrangement means that the Rochester diocese’s parishes are not parties to the diocese’s bankruptcy, which in turn leaves as unsettled questions whether or how much the Rochester diocese’s parishes might contribute to settle the diocese’s own bankruptcy.
The BSA’s plan calls for it, local Boy Scout councils and insurance companies to contribute approximately $2.6 billion to a fund to pay abuse survivors’ claims.
The Rochester diocese’s court papers do not state an amount that the Rochester diocese might contribute to settle BSA claims. The diocese’s filing portrays the effect participation in the BSA fund would have on its own Chapter 11 as “negligible.”
Participation in the fund would satisfy claims Rochester parishes might otherwise individually face in the BSA bankruptcy, the filing states.