Diocese of Rockville reaches $323 million bankruptcy settlement over sex abuse claims

The Roman Catholic Diocese of Rockville Center in New York reports that it has reached an agreement with survivors, insurers, parishes and other parties on a settlement of its bankruptcy case that includes a $323 million fund to compensate victims sexual abuse by the clergy.

The proposed total settlement includes insurance contributions, diocesan assets and proceeds from the sale of diocesan properties, and contributions from parishes and other related entities. The diocese, parishes and other related entities will contribute a total of $234.8 million. Insurance companies will contribute a total of about $85 million. The creditor committee advisor will contribute $3 million.

The conditions were made public at a hearing on September 26.

Part of the settlement plan involves all parishes entering an abbreviated Chapter 11 with the approval of the court and the parties to the case to secure a release from liability for the parishes. No parish is closing as a result of this process.

“The Diocese’s goal has always been to fairly compensate survivors of abuse while allowing the Church to continue its essential mission. We believe this plan will achieve these goals,” the diocese said in a statement announcing the agreement.

Adam Slater, managing partner of Slater Slater Schulman LLP, which represents 100 of the approximately 600 survivor-plaintiffs in the matter, said this is the largest diocesan settlement in New York State history and the first diocesan settlement to go national after the recent Purdue Pharma Supreme Court decision regarding non-consensual third-party releases.

“The majority of our clients are in their 60s and 70s – they have waited decades for justice and we are extremely pleased to reach this settlement on their behalf,” said Slater.

Jeff Anderson, another survivor advocate, credited the “courage, perseverance and truth of survivors” for the settlement and noted that dioceses, bishops, parishes and schools must have “rigorous child protection. protocols in force as part of this agreement.”

The Diocese of Rockville filed for bankruptcy protection in October 2020 as it faced more than 600 lawsuits alleging clergy abuse after New York State enacted the Child Victims Act in 2019. The law allowed survivors to file retroactive processes and eliminate the statute of limitations for all. future lawsuits based on claims of childhood sexual abuse.

The Diocese of Rockville Center has 132 parishes. Priests working at numerous churches in the diocese have been accused of sexually assaulting minors. The diocese’s bankruptcy filing halted abuse cases in state court, subject to the church coming up with a plan with insurers and survivors and approved by the bankruptcy court to handle the claims.

The bankruptcy court gave the church until Oct. 31 to come up with a plan. If there is no plan, the judge could end the bankruptcy process and return the cases to state court. The first trial was scheduled to begin in just a few weeks.

Insurers involved in the talks include Allianz Interstate Fire & Casualty Co., Fireman’s Fund Insurance Co. and National Surety Corp., along with certain underwriters from Lloyd’s and London Market Companies. Insurers issued policies covering the period 1976-1986. Allianz companies have taken out excess insurance coverage.

The participation of another insurer, Arrowood Indemnity, is uncertain as it is currently involved in liquidation proceedings in Delaware.

In April 2024, the diocese proposed a $200 million settlement, which was rejected by the survivors. The bankruptcy court then ordered the parties to resume settlement negotiations.

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