Diocese of Syracuse, N.Y., committee representing abuse victims reach settlement

By The Catholic Sun, OSV News

SYRACUSE, N.Y. (OSV News) -- The Diocese of Syracuse has reached a multimillion dollar settlement in its June 2020 bankruptcy case, in an effort to redress both current and potential abuse claims.

The Roman Catholic Diocese of Syracuse and the Official Committee of Unsecured Creditors announced July 27 they reached a settlement agreement in the Chapter 11 case filed in U.S. Bankruptcy Court in the Northern District of New York June 19, 2020.

The settlement will provide payment in the amount of $100 million dollars to all survivors of sexual abuse for acts perpetrated against them by clergy, religious, lay employees and volunteers.

That amount will be raised through a $50 million contribution from the diocese, along with a $45 million total contribution from 119 parishes that are part of the diocesan structure. The remaining $5 million will be contributed by other diocesan entities.

Because only unrestricted funds can be used to fund the contributions to the settlement, restricted gifts to parishes and other entities, as well as contributions to the diocese's Annual Hope Appeal campaign, cannot be used to fund the settlement.

"I can tell you as shocking as the settlement amount may seem to leaders of our own parishes and other Catholic entities, more appalling and heart-rending to me is the pain and mistreatment experienced by the survivors of child and adult sexual abuse at the hands of those they thought they could trust," said Syracuse Bishop Douglas J. Lucia in a July 27 letter to diocesan faithful.

"I cannot apologize enough for the abuse which happened or for any neglect in dealing with it," said the bishop. "This is why the final settlement will include commitments meant to strengthen our safe environment protocols to further ensure the past does not repeat itself."

In a video message posted to the diocesan website, Bishop Lucia also called for diocesan parishes to celebrate "Mass for the Forgiveness of Sins" during the weekend of July 29 and 30.

"As a Catholic family, it is our moral obligation to provide reparation and share a role in bringing healing and reconciliation to the survivors," he said. "We ask pardon for sins of commission and omission, as we pray for all victims and survivors of sexual abuse, as well as those who have been scarred mentally, emotionally, and spiritually by these heinous actions."

The settlement calls for unrestricted funds to be contributed to the Victims’ Trust, which will in turn be used to settle 387 unique claims filed when both the Child Victims Act and the Adult Survivors Act took effect in New York state.

Together, the two acts allowed claims of abuse to be filed regardless of any statute of limitations. Child Victims Act claims could be filed through April 15, 2021, and Adult Survivor Act claims through Jan. 17, 2023, naming the diocese, parishes and other Catholic entities.

In June 2020, Bishop Lucia announced the diocese had entered Chapter 11 reorganization in order to resolve the claims in a fair and equitable manner. If the diocese had not filed for Chapter 11, cases would have proceeded in the courts and the first few would receive the funds available, leaving other claimants with little or nothing for their claims.

The diocese has incurred legal costs of nearly $11 million to date due to the claims and the filing.

With this settlement, the diocese, its parishes and other Catholic entities are protected through a channeling injunction against any further liability.

The settlement does not include a contribution from any of the six insurance companies that provided coverage to the diocese, which along with the committee plans to continue negotiations with the insurance carriers to reach a global settlement.

Insurance coverage has become a critical factor in diocesan bankruptcies and settlements, Marie Reilly, a professor at Penn State Law and an expert in bankruptcy and commercial law, told OSV News.

Over the years, insurers have significantly restricted the terms of their general comprehensive liability policies, excluding coverage for incidents that took place decades earlier and challenging current claims as well, said Reilly, who catalogs and studies U.S. Catholic diocesan bankruptcies in depth.

"Insurers in the last five to 10 years have really been raising a lot of legal defenses, and uncertainty about their liability on these policies has made it much more complicated to settle cases," Reilly told OSV News.

Dioceses looking to stanch the financial bleed of legal fees can opt to settle claims up front and seek insurance compensation later, offering their own insurance rights as part of the settlement, she said.

Amid the "unspeakably horrific" reality of sexual abuse, settlements such as the one the Dicoese of Syracuse has reached offer a ray of hope, said Reilly.

With a federal bankruptcy court approving the settlement, the diocese is protected from further state-mandated claims windows, she said.

A post-settlement diocese, though a "smaller, leaner operation," can "really focus on the mission of today, of the Catholic faith, and pass on to our kids a church that is forward-looking," Reilly said.