New York Catholic Diocese Reaches $323 Million Settlement for Sex Abuse Claims, Reports Reuters

By Dietrich Knauth

NEW YORK – A Roman Catholic diocese in Long Island, New York, has announced a significant bankruptcy settlement that will pay over $323 million to approximately 530 survivors of sexual abuse who allege they were abused by priests in their childhood.

The Roman Catholic Diocese of Rockville Centre, which serves around 1.2 million Catholics across Nassau and Suffolk counties, had previously expressed doubts about the feasibility of a bankruptcy settlement earlier this year, particularly after abuse survivors rejected an earlier offer of $200 million.

U.S. Bankruptcy Judge Martin Glenn, overseeing the case in Manhattan, remarked that the settlement signifies "enormous progress," especially considering the bankruptcy proceedings nearly faced failure.

In this agreement, Rockville Centre will contribute $234.8 million to a settlement fund, while four insurance companies will add $85.3 million. Additional funds will come from another insurer undergoing liquidation in a separate insolvency process, as well as from the attorneys representing the survivors.

Rev. Eric Fasano, a spokesman for the diocese, stated that the settlement would allow for "the equitable compensation of survivors of abuse while allowing the Church to continue its essential mission."

The diocese filed for Chapter 11 bankruptcy protection in October 2020, citing the financial burden resulting from lawsuits filed by childhood victims of clergy sexual abuse. In recent years, over two dozen Catholic dioceses have sought bankruptcy protection following new laws in New York and other states that temporarily enabled victims of child sexual abuse to file lawsuits regarding long-ago offenses.

This settlement could pave a new way for numerous Catholic dioceses that have also declared bankruptcy in order to address sexual abuse claims. Previously, dioceses had depended on bankruptcy courts to offer extensive legal protections for non-bankrupt entities contributing to settlement funds, a strategy that was overturned by the U.S. Supreme Court this year.

The ruling, which arose from the bankruptcy of Purdue Pharma, compelled the dioceses to find alternative methods to encourage contributions for settlements from insurers and parishes.

Rockville Centre tackled this issue by agreeing for all its parishes to file for bankruptcy, which allowed them to obtain legal protections while placing their assets and liabilities under court supervision, as explained by the diocese’s attorney, Corinne Ball, in court. The insurers then agreed to buy back their policies from the diocese and its parishes, thereby absolving them of liability for the sexual abuse claims.