Catholic Diocese of Syracuse to file for bankruptcy amid Child Victims Act suits

CNA Staff, Jun 19, 2020 / 11:16 am

The Diocese of Syracuse announced Friday it would file for Chapter 11 bankruptcy amid the financial impact of numerous sexual abuse lawsuits.

New York's Child Victims Act, which passed early last year, opened a one-year window for adults in the state who were sexually abused as children to file lawsuits against their abusers.

The CVA also allows child abuse victims to file criminal charges up to age 28, and lawsuits up to age 55. Previously, they had until the age of 23 to file charges or a civil claim.

Bishop Douglas Lucia- who has led the diocese for less than a year- said in a June 19 letter that without the reorganization, alleged victims who filed their abuse claims under the CVA first, or pursued their claim more aggressively, would deplete the dioceses' resources and leave the diocese unable to pay other alleged victims.

"The challenge this situation presents our Diocese is simply that one jury award could so diminish our assets that we would have little or nothing with which to resolve the other claims or carry on the important ministries of our diocese," he wrote.

The bankruptcy filing will create a process where claims are treated in a "just and equitable way," so that "available funds will be allocated to all victims fairly," Lucia said.

"Today's action will require the Diocese to be under court supervision in its Chapter 11 case for many months. However, after an exhaustive study by myself and those in Diocesan Administration, I feel it is the only way we can address victims' claims in the most fair and equitable manner, while maintaining the vital ministries and mission of the diocese," he wrote.

Lucia said at a June 19 press conference that the decision to file bankruptcy was primarily in reaction to the number of sexual abuse lawsuits- over 100- that the diocese currently is facing.

"All claims of abuse are decades old, dating back from 1949 to the 1990s," he said.

Future sexual abuse claims will have to be brought before the Northern Distrct of New York bankruptcy court. The bankruptcy court will set a final date when claimants can file sexual abuse claims against the diocese, diocesan lawyer Charles Sullivan said, and a court-appointed person will evaluate the claims.

Lucia said only the diocese itself has filed for Chapter 11; the parishes, foundation, Catholic Charities, and Catholic schools of Syracuse are separate corporations and are not affected by the bankruptcy filing.

Stephan Breen, the diocese's CFO, said the filing would not affect the parishes and schools because parishes are primarily supported by collections, and schools by tuition, rather than from contributions from the diocese.

The diocese has 158 employees in total and Breen said no layoffs are expected at this time.

Lucia requested prayers for victims of abuse on the feast of the Sacred Heart of Jesus.

"I can't apologize enough for the heinous acts that were perpetrated against the young of our diocese, and I ask you to join me in the diocesan commitment that this will never happen again," Lucia said.

Syracuse joins several other New York dioceses in declaring bankruptcy, as well as dozens across the country, many in response to sexual abuse lawsuits.

The dioceses of Buffalo and Rochester both have declared bankruptcy in the past year- Rochester during September 2019 and Buffalo during Feb 2020.  

In April, the Buffalo and Rochester dioceses sued the Small Business Administration after they were blocked from emergency small business loans under the Paycheck Protection Program because of their bankruptcy status. Earlier this month, a federal judge rejected the lawsuit.

The Diocese of Rockville Centre has requested a pause in the proceedings of numerous sex abuse lawsuits it is facing, and said it may have to declare bankruptcy if it is not granted.

The CVA "window" is expected to be extended until August 2021; Governor Andrew Cuomo had previously extended it to January 2021. Statewide, alleged victims have filed over 1,700 lawsuits.