The Roman Catholic Diocese of Rockville Centre

Representation of the official committee of unsecured creditors in the chapter 11 bankruptcy of the Diocese of Rockville Centre. The filing came in October 2020 after the diocese was named in more than 200 lawsuits over sexual abuse allegations. The debtor is the largest Roman Catholic diocese in the U.S. to declare chapter 11 bankruptcy.

PSZJ successfully overcame the debtor’s attempted to truncate the window opened by the New York legislature for survivors of child sexual abuse to timely file claims, giving survivors until the statutory deadline to file claims.

After a two-day trial, in June 2023, the Bankruptcy Court denied the debtor’s attempt to stay litigation against affiliated nondebtor entities over the committee’s objection. The debtor then proceeded to remove the nondebtor litigation in federal court, Judge Gary Brown of the Eastern District of New York was the first of over a dozen federal judges to remand the cases back to state court, state that “Critics of the law have long decried unimaginable delays and costs that can arise from excessive litigative wrangling. Such waits can range from the intolerable to the unconscionable. The matters discussed herein fall squarely into the latter category.”

In the spring of 2024, the debtor attempted to bypass the committee and propose a plan that inadequately marshalled its available assets to compensate survivors. The committee worked with survivors to resoundingly reject the debtor’s plan.