ALBANY — The Roman Catholic Diocese of Rochester filed for bankruptcy protection on Thursday in the face of mounting clergy abuse lawsuits filed against the diocese in the wake of the passage of the state’s Child Victims Act.
The Chapter 11 bankruptcy filing could potentially provide a road map to other upstate dioceses — including the Diocese of Buffalo — on how to protect themselves from the sudden onslaught of abuse claims unleashed by the new law, signed by Gov. Andrew M. Cuomo in February.
The Rochester diocese, like the Buffalo, Albany and other dioceses in the state, has been served with dozens of lawsuits alleging child sexual abuse by priests and other parish leaders reaching back decades.
In addition to facing the prospect of having to potentially pay out millions of dollars in court judgments or settlements, the church also will be facing large legal bills to defend itself from the suits and produce evidence for discovery in the cases.
In the Diocese of Buffalo, Bishop Richard Malone has indicated that bankruptcy is an option under consideration.
Responding to a question from WBFO radio Thursday, after news of the Rochester diocese broke, the Buffalo Diocese stated: “Like every Diocese in the state of New York, the Diocese of Buffalo is consulting financial experts, insurance carriers and working with our Finance Council to review the options available to fairly address the lawsuits filed by survivors and to continue our mission as a Diocese.”
James Faluszczak, a former priest and abuse victim turned advocate for other clergy sex abuse victims, told WBFO he believes the Diocese of Buffalo will ultimately follow the same path as Rochester.
“Yes. We sort of expect it,” Faluszczak said. “I certainly hope, with everything else tarnishing his legacy at this point, would choose not to do that.”
The Chapter 11 reorganization petition the Rochester diocese filed in U.S. Bankruptcy Court — first reported Thursday morning by the Rochester Democrat & Chronicle — estimates it has assets valued between $50 million and $100 million. It lists far greater liabilities of between $100 million and $500 million.
Rochester is the first of the state’s eight dioceses to declare bankruptcy. It serves 309,000 Catholics in 12 counties.
Roman Catholic entities around the country — including dioceses in San Diego, Calif.; Milwaukee, Wis.; and Portland, Ore. — have sought bankruptcy protection amid lawsuits from victims of sexual abuse and other forms of misconduct.
Cynthia LaFave, a Guilderland personal injury attorney who has partnered with the law firm Jeff Anderson & Associates to sue the Albany, Buffalo and other dioceses in the state, said the bankruptcy filing by the Rochester diocese is an attempt to evade the truth.
”What they’re trying to do is keep us from doing legal discovery,” LaFave said. “It’s very disturbing. Ultimately, they are going to have to disclose the facts, but this is just another attempt to shut (the cases) down.”
”The bishop’s choice to use reorganization as a legal tactic is very disturbing and disappointing,” Jeff Anderson said in a statement. He called the move “simply a legal tactic to protect assets and prevent jury trials, and an attempt to prevent the truth from being revealed.”
One possible consequence of the bankruptcy process is a shortened timeline for people to file claims against the diocese under the CVA, which extended the statute of limitations in both criminal and civil cases of child sexual abuse.
Michelle Simpson Tuegel, an attorney who has worked with abuse survivors from USA Gymnastics and other organizations, said a bankruptcy court will typically put a stay on any state litigation and set a period for any additional claims to be filed. Once that period ends, any new plaintiffs face a high bar to see their claims addressed, she said.
”It’s really important that survivors in different areas where the entity declares bankruptcy go ahead and get an attorney,” Tuegel said. “I know some people are sitting on it right now, and a lot of survivors are thinking, ‘Do I really want to go through this process? ... I have a year.’ I think there’s the potential (that) with bankruptcies, their timeline could get shorter.”
In its Chapter 11 petition, the Rochester diocese’s list of creditors with the 20 largest unsecured claims includes 19 plaintiffs who have filed clergy abuse lawsuits against the diocese.
Of those 19, six were filed by Jeff Anderson & Associates, which like other law firms has been busy filing clergy abuse lawsuits in response to the passage of the Child Victims Act, which on Aug. 14 opened a one-year “look-back window” in which previously time-barred sexual abuse claims can be filed.
As of Monday, 639 Child Victims Act cases have been filed statewide.
The Rochester diocese values each lawsuit as a $100,000 unsecured debt as a placeholder for any potential future court judgments, although the filing notes that the suits are “contingent, unliquidated, disputed.”
State Sen. Brad Hoylman, a Manhattan Democrat who sponsored the CVA, said Thursday that that the bankruptcy filing was an attempt to evade the purpose and spirit of the law.
”It’s despicable that the Rochester Diocese would file a voluntary bankruptcy to shield their assets from sexual abuse survivors suing through the Child Victims Act,” Hoylman said in a statement. “For decades, survivors of child sexual abuse unsuccessfully pleaded for help from the church. As a result, we passed the Child Victims Act so survivors would finally have their day in court and hold accountable their abusers and the institutions that may have harbored them.”