Diocese of Rochester Survivors Reach Settlement to Resolve Diocese's Chapter 11 Case
FOR IMMEDIATE RELEASE
New York, NY – November 3, 2022 – After more than three years of intense work, the Official Creditors Committee (“Committee”) has negotiated a settlement with the Diocese of Rochester to resolve the Diocese’s Chapter 11 case. The Committee, counseled by Pachulski Stang Ziehl & Jones LLP (“PSZJ”), was appointed at the outset of the case to represent the interests of the approximately 475 sexual abuse survivors who asserted claims against the Diocese. The settlement provides that the Diocese and related entities will pay $55 million to a trust for the benefit of survivors and assign valuable insurance rights to that trust. Many survivors will also be able to pursue their claims in court against the Diocese and related entities in order to recover proceeds from their insurance policies.
The Diocese previously announced a settlement of approximately $106 million with its insurers, which the Committee deemed inadequate. Under the new settlement, the insurance policies will be assigned to a trust that will pursue a more substantial recovery from the insurers. The settlement funding does not include any money from the Diocese’s insurers.
In exchange for the settlement payment, the Diocese will receive a discharge in bankruptcy and the affiliates will be released of their liabilities for the sexual abuse claims. Perpetrators and non-affiliates of the Diocese, such as religious orders, are not included in the settlement and will not be released.
The negotiated settlement will be incorporated into a plan of reorganization that survivors will have an opportunity to vote on. The Committee expects that process to take approximately six months to complete.
“The settlement is the result of the Committee’s hard work and tenacity. The courage and faith of Rochester’s survivors empowered the Committee to stand up and negotiate a settlement on our terms. The bankruptcy case has lasted a long time, and the Diocese’s insurers still have not stepped up to provide an adequate recovery for survivors. This settlement will allow survivors to take control of the process and pursue financial recoveries from the insurers that are acceptable to us,” said Jim Cali, Chair of the Committee.
“The Committee has sought a fair and reasonable resolution for Rochester’s survivors for over three years. The Committee has stood strong and united in its efforts to represent the interests of their fellow survivors. It will continue to do so as we move into the next phase of this process, which will seek an appropriate payment from the Diocese’s insurers,” said Ilan Scharf of Pachulski Stang Ziehl & Jones LLP.
“The Diocese’s insurers have not come forward with a sufficient settlement, and this agreement gives survivors the tools needed to seek an appropriate settlement from the Diocese’s insurers,” said Timothy Burns of Burns Bowen Bair LLP, insurance counsel to the Committee.
The case is In Re: The Diocese of Rochester; Case Number: 19-20905 (PRW); Western District of New York.
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Contact: Ilan D. Scharf (ischarf@pszjlaw.com)