Diocese of Buffalo Seeks to Transfer 35 Abuse Claims to Boy Scout Bankruptcy Plan
Thirty-five Child Victims Act lawsuits against the Catholic Diocese of Buffalo could end up being settled in federal bankruptcy court — albeit through the Boy Scouts of America’s Chapter 11 plan, not through the bankruptcy process of the diocese.
Lawyers for the diocese asked Chief Judge Carl L. Bucki of the U.S. Bankruptcy Court for the Western District of New York to let the diocese “opt-in” to the Boy Scouts settlement plan that was approved in September.
If approved, the move would allow the diocese to transfer 35 claims of childhood sexual abuse — a small fraction of the more than 900 complaints filed against it — to a $2.46 billion settlement trust in the case. bankruptcy of the Boy Scouts. The diocese would transfer its rights to insurance coverage under the Boy Scouts of America policies to the trust. The diocese would also be granted “limited protected party” status, whereby any Scouting-related abuse litigation would be suspended for at least 12 months, while the diocese negotiates an “appropriate contribution” with the settlement trust.
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The 252 local councils across the United States have agreed to contribute a total of $519.6 million in cash and property, plus a promissory note of approximately $100 million, to the settlement trust.
Routing the 35 claims to the trust “would result in the availability of additional funds to distribute to other abuse claimants in the diocese’s bankruptcy case,” said Richard C. Suchan, the diocese’s chief operating officer. , in court documents filed last week.
Participating in the Boy Scout plan “represents a fair and equitable compromise of issues” and was “in the best interest of the Diocese’s estate and all of its creditors,” including the 35 plaintiffs alleging Scouting-related abuse, Suchan said.
The Diocese’s motion highlights the layers of complexity in the two bankruptcy cases.
The Boy Scouts of America has faced a flood of childhood sexual abuse lawsuits, including about 200 in courts in western New York. He filed for bankruptcy on February 18, 2020. More than 80,000 people have filed sexual abuse claims in the Boy Scouts bankruptcy case. A Delaware federal judge approved his reorganization plan in September, though officials from the official panel of child sexual abuse plaintiffs in the Boy Scout bankruptcy said the plan may not take effect for six to 18 months.
Victims will be eligible for minimum awards of $3,500 and up to a maximum of $2.7 million, depending on the severity and frequency of the abuse and other mitigating factors, including whether the abuse has produced in a state with statutes of limitations that allowed for the prosecution of sexual abuse cases from many years ago, according to federal court documents.
But it’s still unclear when the claim payments will be made.
The Diocese of Buffalo filed for Chapter 11 protection 10 days after the Boy Scouts of America in 2020, as the number of lawsuits under the Child Victims Act alleging sexual abuse by priests and other employees s amounted to hundreds. The diocese is currently in mediation negotiations with insurers, its parishes and schools and the committee that represents unsecured creditors, namely sexual abuse claimants.
Like many church groups, the diocese, along with its parishes and schools, acted for many years as a “chartered organization”, sponsoring, hosting and otherwise supporting Scouting activities offered by the Boy Scouts of America and three local councils in western New York.
The diocese went public with the priests’ return to ministry saying a review board had looked into the allegations and found them “unsubstantiated”.
As such, he has been named as a defendant in Scouting-related cases.
The diocese has identified 94 lawsuits that identified the diocese or a parish in a case related to the Boy Scouts of America, according to court documents.
Of these, 35 allege abuses that occurred after January 1, 1976 and can be directed to the trust, under the terms of the plan of reorganization. The other 59 abuse claims allege pre-1976 abuse and are not covered by insurance policies issued by the insurance companies that signed on to the settlement.
The diocese plans to address those 59 claims in its own bankruptcy case, according to court documents.
The Diocese of Buffalo joined 10 other dioceses and archdioceses and the Catholic Mutual Relief Society of America as a “Roman Catholic ad hoc committee” that reached a settlement agreement last March with the Boy Scouts of America and other parties to the Boy Scouts bankruptcy, including the official committee representing sexual abuse claimants.
Bucki is due to hear arguments on the Diocese’s motion on Nov. 8.