The Roman Catholic Diocese of Rochester will pay $55 million to survivors of clerical sexual abuse under a settlement announced last week by Rochester Bishop Salvatore Matano.
$55 million from upstate New York parishes, their parishes, and other Catholic organizations will go toward creating a trust to cover claims by abuse survivors. This plan requires the assignment of insurance policies to trusts.However, the insurer did not participate in the settlement at this time and its contribution is not yet known.
The settlement was negotiated with an official creditors committee representing approximately 475 sexual abuse survivors.
In exchange for payment of the settlement money, the parish will receive immunity from bankruptcy and be released from all liability for sexual abuse allegations. The transaction should reduce litigation-related delays and costs for plaintiffs and parishes. Perpetrators and nonmembers of parishes, such as religious orders, are not included in the settlement and will not be released.
After two-and-a-half years of arbitration, the Board of Public Creditors and the insurers have failed to agree a deal on claims payments. Therefore, the restructuring plan as it is currently being written allocates the parish’s insurance policy to the trust so that it can pursue “substantial recovery from insurance companies” than previously proposed, said the Survivor Commissioner. Ilan Scharf, the company’s attorney, said. Pachuluski Stang Zeal & Jones.
“For more than three years, the Commission has sought fair and reasonable solutions for the survivors of Rochester. We will continue to do so as we move to the next stage in this process of seeking proper payment from the parish insurance company,” Schaaf said.
The parish declared bankruptcy in 2019 after hundreds of lawsuits were filed under the state’s Child Victims Act. In this case, about 500 sexual abuse allegations have been filed. The allegations relate to a case of abuse that occurred many years ago.
U.S. bankruptcy judge Paul R. Warren, who is overseeing the bankruptcy, has already approved a plan called the Restructuring Assistance Agreement to go forward. The $55 million settlement will be incorporated into a restructuring plan that survivors can vote on. Schaaf expects the process to take about six months to complete.
the parish I used to have offered $40.5 million in donations With this latest plan, we hope to finally be able to get out of Chapter 11 sometime in mid-summer to early fall 2023.
In his Letter to the Believers, Bishop Matano said, “This reconstruction aid agreement is the most equitable approach for survivors and the most effective way for the diocese and its affiliated Catholic societies to continue their common mission of healing and reconciliation.” I believe it is a viable path,” he said. November 3rd.
The parish was forced to come up with a settlement, despite having no insurance policy, after the survivors’ committee rejected an insurance proposal aimed at breaking the log jam in the Chapter 11 bankruptcy case. The initial proposal, which included certain London market firms, Interstate Fire and Casualty Co., and National Surety Corp., was dismissed by the court in July 2021.
Then, in May of this year, the parish sought approval of a settlement with each parish’s primary insurer (LMI, Interstate, Lloyd’s, London, and certain underwriters of Continental Insurance Company (CNA)) for approximately $107 million. I was. This will be trialled in January 2023.
Noting that both insurance settlements have been “fiercely opposed” by the Public Creditors Committee, the parish faces to achieve confirmation of the Chapter 11 plan meeting the requirements of the second insurance “We are acutely aware of the significant challenges” that could arise, he said. Proposed, but not endorsed by survivors’ committees or by the vast numbers of sexual abuse survivors.
Jeffrey Anderson, an attorney representing 175 petitioners against the Rochester Parish, called it “groundbreaking” that survivors can legally sue all of the parish’s insurance companies. “Today is a historic day with a historic deal,” said Anderson.
Mitchell Garabedian, who represents the 96 plaintiffs, told the Associated Press that the settlement “will allow many victims of clerical sexual abuse to gain due recognition, self-esteem and a sense of accomplishment.” said.
The individual parishes of the Diocese of Rochester were not part of the Chapter 11 filing. However, according to the parish, they have been named in individual lawsuits and face potential liability in individual state court lawsuits that could be directed against the trust under the plan.
The deal also seeks non-monetary commitments from the parish, such as child protection measures and disclosure of certain documents.
Want to stay up to date?
Get the latest insurance news
It will be sent directly to your inbox.