Sunday, January 19, 2025
The four-year legal battle between the Roman Catholic Diocese of Rockville Centre and the survivors of more than 600 child sexual abuse allegations concluded on Wednesday.
Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York approved the terms of the diocese’s Chapter 11 reorganization plan on Dec. 4. The plan includes the terms of a $323 million settlement to be paid out in a trust.
"The survivors, over four years of very litigious proceedings, showed great resiliency," James Stang, one of the lead attorneys representing the survivors, said. "Because of their resolve, we were able to make a deal that was fair to survivors."
Stang said that Glenn confirmed the settlement after 99 percent of survivors who voted on the deal, approved it. Overall, approximately 80 percent of survivors eligible to vote participated. Those who did not vote or who voted "no" are not disenfranchised from taking part in the settlement.
The announcement comes following a recent objection made by William K. Harrington, a United States Trustee serving as a bankruptcy watchdog with the Department of Justice, who claimed the deal would improperly bind the survivors, represented by a Committee of Unsecured Creditors, to “expansive, overbroad and non-consensual releases and injunctions,” without consent, which he claims violates the 2024 U.S. Supreme Court’s Harrington v. Purdue Pharma decision made in June.
In a memorandum from Judge Glenn, issued Nov. 18, he explains in detail, “the Court is unpersuaded.”
“The UST Objection in this respect is also overruled,” Glenn stated in his decision. “For the reasons discussed the motion is granted. The debtor’s (the Diocese of Rockville Centre) entry into the settlement agreements is approved.”
The diocese, which represents 134 parishes across Long Island, initially filed for Chapter 11 in October 2020, after hundreds of lawsuits were brought against it following former Gov. Andrew Cuomo’s approval of the Child Victims Act in 2019, which extended the statute of limitations for sexual abuse claims.
Representatives of the survivors’ committee first proposed a reorganization plan for the diocese in January 2023, offering to settle the claims for $450 million. The diocese responded a month later with a $200 million counter-offer, with contributions to be made by the diocese, its parishes, co-insured parties and other members of the ministry, not including insurance payouts.
The committee rejected the counter-offer in April 2023 and moved to dismiss the bankruptcy case, due to the unlikelihood of reaching a consensus, potentially remanding hundreds of the sexual abuse cases to the state civil courts.
Having determined that the attorneys for the survivors could not substantiate being unable to settle within a “reasonable amount of time,” Glenn rejected the committee’s motion, and in July 2023 he offered the diocese a 100-day window to try to reach an agreement with the survivors.
The $200 million proposal, which the diocese referred to as its “best and final” attempt at a reorganization plan, was ultimately rejected by a supermajority vote of the survivors in April, for not providing adequate compensation for their suffering and lacking any child-protection measures.
In response, the diocese sought to dismiss the case, which prompted Glenn to bring in mediators to try to avoid remanding the individual cases to the state courts. His concern was that if the diocese were to handle things on a case-by-case basis, a large payout in the early goings could risk leaving the diocese with no money for hundreds of other survivors.
Through the help of mediators, a deal was struck in October, outlining the terms of the $323 million settlement. In response, the diocese issued a statement on this historic settlement.
“We are grateful to God that on Dec. 4, the court confirmed the plan that resolves and ends the Bankruptcy case for the Diocese of Rockville Centre, all our parishes and related ministries,” an unidentified spokesperson stated on behalf of the diocese. “For the sake of abuse survivors and the Church’s mission on Long Island, we pray that the plan brings some measure of healing to survivors and allows the church to carry on the saving mission of Jesus Christ. Victim survivors of child abuse deserve our respect, our prayers and our pastoral support. The church is grateful for their courage and perseverance.”
Based on the terms of the approved reorganization plan, the settlement includes $234.8 million from the diocese, its assets and the sale of diocesan property, parishes and other entities. Insurance companies will kick in $85 million and the legal counsel for the creditors committee will contribute $3 million.
Parishes also completed an abbreviated Chapter 11 to secure a release from any past liabilities. None of the parishes will close as a result of the process and no Catholic Ministries Appeal donations were used towards the settlement, according to diocesan officials.
“Parishes will now continue their ministry, free from historical lawsuits and free from bankruptcy,” the diocese spokesperson stated. “The diocese’s goal has always been the equitable compensation of survivors of abuse while allowing the church to continue (its) essential mission. We believe this plan has achieved those goals.”
Stang said funding for the trust is expected to begin immediately following the decision.
"I know the diocese hopes to be out of bankruptcy in the next day or so," he said. "That means money is going to start flowing into the trust from the diocese, parishes and other entities."
While some of the claims are still being reviewed, Stang said that he hopes the diocese will start allocating money to individuals by the end of January.
