Dioceses In New Jersey And New York File For Bankruptcy

In October 2020, the Diocese of Rockville Centre in Long Island, New York and the Diocese of Camden in New Jersey filed for bankruptcy. The two dioceses cited financial difficulties stemming from sexual abuse claims and the COVID-19 pandemic.

Rockville Centre Diocese Bankruptcy

The Diocese of Rockville Centre is the largest U.S. diocese to request bankruptcy protection. Prior to the pandemic, the diocese paid $62 million to settle about 350 sex abuse lawsuits.

In a video announcement, Bishop John O. Barres said more than 200 sexual abuse lawsuits have been filed against the diocese since New York passed the Child Victims Act in February 2019. Additionally, the diocese said its revenue fell 40%, in part because it has been unable to hold in-person masses and collect sufficient offerings during the pandemic.

2021 Rockville Centre Diocese Bankruptcy Update

In December 2020, the Rockville Centre Diocese requested a bar date for victims to file abuse claims through the bankruptcy court. The diocese asked the court to set a bar date of February 17, 2021.

The diocese filed for bankruptcy in October of 2020. The proposed date would give survivors less than four months to file a claim.

In January 2021, U.S. Bankruptcy Court Judge Shelley Chapman denied the diocese’s proposed bar date. Instead, Judge Chapman sided with the lawyers representing the clergy abuse survivors by setting the bar date for August 14, 2021. This August bar date will coincide with the closing of the New York Child Victims Act “look back” window.

Camden Diocese Bankruptcy

The Diocese of Camden is the first diocese in New Jersey to file for bankruptcy. It previously borrowed $8 million to pay survivors.

In New Jersey, Bill S477 opened a “look back” window allowing survivors to file sex abuse lawsuits, even when the standard seven-year statute of limitations has expired.

The “look back” window will close on November 30, 2021.

In a letter to the diocese, Camden Bishop Dennis J. Sullivan wrote that more than 50 lawsuits have been filed against the diocese since the window opened. Additionally, the pandemic has simultaneously reduced the diocese’s revenue.

2021 Camden Diocese Bankruptcy Update

The Diocese of Camden has proposed a bar date for clergy abuse survivors to file claims through the bankruptcy court. The diocese has proposed a bar date of February 26, 2021. 

Lawyers representing survivors have criticized the diocese for this proposed bar date and asked for more time. Many believe the bar date should align with Bill S477’s “look back” window deadline. If the U.S. Bankruptcy Court sides with these victim attorneys, survivors would be able to file claims with the court through November 2021.

Lawyers representing victims have also criticized the monetary details of the diocese’s proposed reorganization plan. If accepted, $10 million would be allocated to a victim trust while $217 million would be divided among other diocesan activities.

U.S. Dioceses Use Bankruptcy To Shield Assets

In May 2020, the Archdiocese of New Orleans became the first U.S. diocese to file for bankruptcy during the pandemic. Similar to the Dioceses of Camden and Rockville Centre, the Archdiocese of New Orleans claimed financial challenges from the combination of abuse lawsuits and COVID-19 led to its decision.

Since 2004, 27 dioceses in the U.S. and its territories have sought bankruptcy protection related to the Catholic Church’s sex abuse crisis. Overall, U.S. Catholic dioceses have paid more than $3 billion to settle sexual abuse lawsuits over several decades.

Filing for bankruptcy allows entities to suspend civil lawsuits and partially freeze their assets. In January, a Bloomberg Businessweek report found that over the past 15 years, the U.S. Catholic Church has withheld more than $2 billion in assets from sex abuse survivors. The Catholic Church accomplished this by transferring and reclassifying assets before declaring bankruptcy.

Survivors Criticize Dioceses’ Bankruptcy Filings

Clergy sex abuse survivors and their attorneys are often critical of dioceses’ bankruptcy filings. They argue bankruptcy allows dioceses and perpetrators to avoid accountability.

It’s a procedural move many church sex abuse survivors have come to expect, according to Mary McHale, a member of the Survivors Network of those Abused by Priests (SNAP).