Another New York diocese files for bankruptcy 

Boston, Mass., Jul 18, 2023 / 12:30 pm

The Diocese of Ogdensburg, New York, is filing for bankruptcy following almost 140 sexual abuse lawsuits for incidents dating back decades filed under the state’s Child Victims Act, which allowed claims to be filed past the statute of limitations for a period of two years ending in 2021.

Fourteen cases so far have either been settled or dismissed, leaving 124 claims of child sexual abuse against the diocese, Darcy Fargo, a diocesan spokeswoman, told CNA.

The purpose of the bankruptcy filing is so that the diocese may be able to compensate each victim and continue serving the faithful with its services and ministries, Ogensburg Bishop Terry LaValley said in his July 17 letter to the faithful of the diocese.

Ogdensburg is the sixth diocese in the state of New York to file for bankruptcy following the passing of the Child Victims Act in 2019. Now, only the Archdiocese of New York and the Diocese of Brooklyn have not filed for bankruptcy as a result of the legislation. 

Several other dioceses across the nation have also filed for bankruptcy amid similar state legislation.

LaValley said that facing the civil suits in court would be a “slow” and “unpredictable” process that would be costly, delaying justice and compensation for survivors. 

“Reorganization ensures that each survivor receives just compensation. It eliminates a race to the courthouse in which the earliest cases settled or brought to judgment could exhaust the resources available to pay claims, leaving nothing for victims whose cases are resolved later,” he said. 

“As we embark on this journey towards reorganization, I ask you to join me to pray for all victims of child sexual abuse. May this process give them a sense of peace and bring them healing that comes from God alone,” LaValley said.

Parishes and other related Catholic entities are separate corporations in New York, so only the diocese will be filing for bankruptcy, LaValley said.

He said he hopes the diocese’s bankruptcy filing will resolve all the claims against parishes and Catholic entities as well.

“It is likely that parishes will be asked to contribute funds to settle these claims so they can be free of litigation in state courts and released from all liability for existing claims,” he added.

LaValley said the decision to file for bankruptcy was “difficult and painful yet necessary.”

He apologized to child victims of clergy sexual abuse and abuse from other Church employees. He also apologized for the suffering that victims and their families went through as a result of sexual abuse.

“I remain committed to helping victims find hope, healing, and some peace of mind. I remain equally committed to maintaining a safe environment in our Church for all, especially our children and young people,” he said.

“Filing for reorganization does not hinder claims filed by victims of sexual abuse. Rather, it establishes a process for all claims to be treated fairly. Reorganization enables the diocese to resolve the claims in one court in an efficient and timely manner,” LaValley added.

The bishop said that the diocese will be able to continue offering its programs, services, and ministries as a result of its Chapter 11 bankruptcy filing. 

“With the help of our advisers, we will evaluate diocesan assets to determine how we can maintain our mission while seeking to compensate victims fairly. We will continue our mission,” he said.

More information on the bankruptcy filing, including a list of frequently asked questions, can be found here.