Roman Catholic Diocese of Rockville Centre Bankruptcy Settlement

By Dietrich Knauth
NEW YORK (Reuters) – A Roman Catholic diocese in Long Island, New York, announced a new bankruptcy settlement on Thursday that will pay more than $323 million to about 530 sex abuse survivors who alleged abuse by priests in their childhood.

The Roman Catholic Diocese of Rockville Centre, serving about 1.2 million Catholics in Nassau and Suffolk counties, expressed earlier this year that it didn’t believe a bankruptcy settlement was possible after survivors rejected a previous $200 million offer.

U.S. Bankruptcy Judge Martin Glenn, overseeing the case, stated that the deal marked “enormous progress” after bankruptcy proceedings came “within a hair’s breadth” of failure.

Rockville Centre will contribute $234.8 million to the settlement fund, with four insurers adding $85.3 million. Additional funding will come from another insurer being liquidated and from attorneys representing abuse survivors.

Diocese spokesman Rev. Eric Fasano noted that the settlement will ensure fair compensation for survivors while allowing the Church to continue its essential mission.

The diocese filed for Chapter 11 bankruptcy in New York in October 2020, due to mounting costs from lawsuits filed by childhood victims of clergy sexual abuse. More than two dozen dioceses have filed for bankruptcy recently, driven by new laws allowing victims of child sexual abuse to pursue lawsuits over decades-old crimes.

Thursday’s settlement may pave a new way forward for many Catholic dioceses facing similar bankruptcy situations to address sex abuse claims. Previously, dioceses relied on legal protections from bankruptcy courts for non-bankrupt entities contributing to settlement funds, which the U.S. Supreme Court invalidated this year.

In resolving this issue, Rockville Centre agreed to have all its parishes file for bankruptcy, enabling them to gain legal protections while subjecting their assets and liabilities to court oversight. Insurers then concurred to buy back their policies from the diocese and parishes, thereby ending their responsibility to cover sex abuse claims.