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Buffalo Diocese files for bankruptcy after hundreds of sex abuse claims

Buffalo Diocese files for bankruptcy after hundreds of sex abuse claims. Albany Bishop Edward B. Scharfenberger has led the diocese since December.
By Cayla Harris
https://www.timesunion.com/news/article/Buffalo-Diocese-files-for-bankruptcy-after-hundred-15091849.php

The Buffalo Diocese, temporarily headed by Albany Bishop Edward B. Scharfenberger, filed for bankruptcy Friday morning as it grapples with hundreds of lawsuits alleging decades of child sexual abuse and cover-ups.

It is the second New York diocese to file for Chapter 11 bankruptcy – which allows for reorganization of assets instead of liquidation. The Diocese of Rochester filed for bankruptcy in September. The decision was largely anticipated as the Buffalo diocese, facing more than 250 lawsuits over the past six months alleging sexual abuse, has emerged as the most-named defendant in all Child Victims Act cases.

The state’s Child Victims Act in August opened a one-year window temporarily eliminating the statute of limitations for civil cases involving sex crimes. Since then, more than 1,600 cases have been filed statewide, many of them resurfacing decades-old allegations.

In a filing in the U.S. Bankruptcy Court in the Western District of New York – first reported by The Buffalo News – the Buffalo Diocese identified $10 million to $50 million in assets and $50 million to $100 million in liabilities. In court filings, Scharfenberger asserted that the filing was necessary “in order to respond to claims stemming from the Child Victims Act in an equitable and comprehensive manner, and to reorganize the financial affairs of the Diocese in order to permit it to continue to fulfill its ministries to the Catholic faithful of the Diocese.”

“We have no more urgent work than to bring about justice and healing for those harmed by the scourge of sexual abuse,” Scharfenberger said in a Friday statement.

The decision puts all lawsuits against the diocese on pause as leaders determine how best to address the allegations and compensate accusers. It does not affect the daily operations of local parishes.

Scharfenberger, who is temporarily leading the Buffalo Diocese after the resignation of its former Bishop Richard Malone in December, will address the media in Buffalo at a 1 p.m. news conference. He had been weighing the decision for months, repeatedly telling reporters that a decision would come “soon.”

“Whatever we do has to be done in a way that puts victims first,” Scharfenberger told Albany reporters in December, acknowledging that bankruptcy could freeze litigation but may also offer more equal payouts to survivors who have filed claims. “We want to look at all of those things, and then that might be the best way to go.”

He said at the time that the Albany Diocese is not considering a bankruptcy filing, and likely would not for “the next year or so.” The Albany Diocese has also faced its share of Child Victims Act cases, though far fewer, at about 65. The Albany Diocese serves about half the number of Catholics as the Buffalo Diocese.

“The decision in Buffalo does not affect the Diocese of Albany in any way,” Albany Diocese spokeswoman Mary DeTurris-Poust said in an email. “Until we know the full financial scope of the CVA as it relates to the Diocese of Albany, we cannot and will not make any decisions. We have nothing to announce, other than that we continue to respond in justice to survivors of abuse and urge anyone who has suffered such abuse to come forward.”

Survivors and attorneys, reacting to Friday’s filing, criticized the decision as a roundabout way of denying victims their day in court. They noted that bankruptcy allows the diocese to avoid releasing certain information and files about priests and clergy accused of abusing children – documents that would typically be unearthed during the discovery process.

Manhattan-based attorney Jeff Anderson, who represents dozens of survivors suing the Buffalo Diocese, said the diocese “is using bankruptcy to continue to conceal the truth about predator priests.”

State Sen. Brad Hoylman, D-Manhattan, a sponsor of the Child Victims Act, said the filing could help reveal “how deep the pockets are of the institution” – but at the expense of preventing survivors from speaking out in front of a judge in a public courtroom.

“It’s despicable that an institution that was responsible for the abuse of thousands of young people across the state of New York would try to hide behind the bankruptcy laws to prevent these individuals from receiving the entirety of the claim due to them,” he said.