Long Island, Camden Dioceses Bankrupted By Child Sex Abuse Lawsuits
The Diocese of Rockville Centre, covering most of suburban Long Island in New York, filed for chapter 11 bankruptcy on Wednesday, putting over 200 child sex abuse lawsuits on hold. The Diocese of Camden filed for chapter 11 bankruptcy the next day, telling the court it has over 200 creditors and estimated liabilities of $25.7 million, as well as 17 unresolved claims, most of which are priest abuse claims.
The Long Island diocese has seen numerous claims since the state of New York lifted the statute of limitations for child sex abuse survivors. It is the eighth-largest diocese in the United States by number of baptized Catholics, and it is the largest diocese to file for bankruptcy.
The diocese said in bankruptcy court filings that it would stop paying abuse victims under a settlement process. The diocese has paid out $62 million to 350 abuse victims under its settlement program, according to court filings.
The diocese said its financial woes have been further worsened by the COVID-19 pandemic, as collections at parishes disappeared since churches had to cancel masses.
The Camden diocese was the first in New Jersey to file for bankruptcy since Gov. Phil Murphy signed a bill last year which gave child sex abuse victims new lawsuit opportunities. The church has already paid out over $8 million to victims according to Bishop Dennis J. Sullivan.
Sullivan wrote in a letter that the Camden diocese, too, has seen its financial woes worsened by COVID-19.
“If it were just the pandemic, or just the costs of the Victims Compensation Program, we could likely weather the financial impact,” Sullivan wrote. “However, the combination of these factors has made that impracticable.”
The Camden diocese faces over 50 lawsuits which remain pending in court. It has listed property assets worth $53.6 million.
Institutions in recent years have found that they’ve been able to limit the assets which are available to victims for compensation by exploiting bankruptcy law and making wise financial decisions. Filing for chapter 11 bankruptcy can also reduce an institution’s legal fees and establish deadlines for victims to file claims.
Child sex abuse settlements often end up drawing from insurance coverage, sometimes from decades-old insurance policies. The Long Island diocese has been looking through old policies, hoping insurance companies can alleviate some of their liability, saying that these policies will probably “be the single most important estate asset available to compensate creditors.”