Diocese of Rockville Centre declares Chapter 11 bankruptcy

The Diocese of Rockville Centre filed for Chapter 11 bankruptcy Thursday because of the financial strain of lawsuits by sexual abuse victims under New York’s Child Victims Act, which took effect last year.

The CVA allows victims to sue for decades-old cases, whereas before a state statute of limitations on sexual abuse claims often prevented them from doing so (see sidebar).

In an 11-minute video on the Catholic Faith Network, Bishop John Barres, spiritual leader of the diocese, which encompasses Nassau and Suffolk counties, announced the bankruptcy filing, which was made in U.S. Bankruptcy Court for the Southern District of New York.

Rockville Centre is among the nation's 10 largest dioceses, and is home to 1.4 million Catholics. It is among a growing number of dioceses that are filing bankruptcy because they must defend sexual abuse lawsuits. It is the largest diocese to file to date.

Barres spoke directly to Long Island parishioners. “Our goal is to make sure that all clergy sexual abuse survivors are afforded just and equitable compensation,” he said. “It is our hope that this offers survivors the possibility of some measure of healing from these horrific abuses.”

The bishop said the diocese had no choice but to file for Chapter 11 reorganization. “This decision was not made lightly,” Barres said. “However, in the year since the passing of the Child’s Victim Act, more than 200 lawsuits alleging abuse have been filed against the Diocese of Rockville Centre.”

Barres said the diocese would be able to continue its charitable and educational missions under the Chapter 11 filing because all the lawsuits will be centralized into one litigation pool, saving the diocese in attorney's fees. Otherwise, he said, the "increasingly heavy burden” of litigation could have begun to affect the work of the diocese, which to date has spent about $3.7 million defending 94 lawsuits filed under the CVA.

A settlement, Barres said, will be determined based on the diocese's assets.

The diocese began cutting expenses last October to help cover the cost of the lawsuits, saving $3.5 million annually. Then, the coronavirus pandemic struck, and its weekly offerings by congregants at Masses dropped "precipitously," according to a diocese news release. Roughly 40 percent of the diocese's income comes from weekly offerings. In August, the diocese cut 10 percent of its staff at its pastoral center in Rockville Centre, saving $5 million a year.

According to Barres, the process of Chapter 11 is the only way to offer a “fair and equitable outcome for everyone involved." That was also the goal, he said, of the Independent Reconciliation Compensation Program, which was started in 2017 and has paid more than $62 million to roughly 350 survivors, according to the diocese release. 

The IRCP, a voluntary program, ended with the bankruptcy filing, the release said.

Barres said he expects regular operations and ministries to continue during the restructuring process, and that employees and vendors will continue to be paid. Additionally, he said, since parishes and Catholic schools operate as separate legal entities, they are not included in the filing. However, he noted that the filing would affect the diocese’s ability to provide financial support to parishes and schools.

“We will work diligently with all survivors, creditors and ministries to maintain open communication while we work toward our goal of completing a settlement and finalizing a restructuring plan that includes a comprehensive and final resolution for suffering survivors,” Barres said.

Attorney Jeff Anderson, of Jeff Anderson & Associates in Manhattan, whose firm represents more than 70 sexual abuse survivors, said the decision is “disappointing, yet unsurprising.

“Like their recent attacks on the Child Victims Act and their efforts to intimidate survivors from coming forward," Anderson said, "we see the diocese’s decision to declare bankruptcy as strategic, cowardly and wholly self-serving. 

“Bishop Barres often states publicly that the diocese is trying to atone for its tremendous sins in its long history of failing to protect children," he continued, "but in the courtroom, the diocese’s representatives are filing unfounded motions, baseless appeals and resorting to intimidation tactics to keep survivors from coming forward.”

Anderson explained that the bankruptcy filing presents an obstacle for survivors as they try to seek justice. “Bankruptcy can limit survivors’ ability to unearth names and information regarding predator priests, expose top officials who covered up for the sexually abusive clergy,” he said, “and bring to light what these officials knew and when they knew it.”

He said the filing does not mean the diocese is bankrupt and said the diocese is using the bankruptcy code for reorganization as a way to slow the reconciliation process. 

“It’s not because they can’t pay,” Anderson said. “They want to stop us and the survivors from revealing publicly…the real histories of the practices employed by the Catholic bishops.”

He noted that in the documents filed in court, the diocese’s liabilities and assets are both listed. “They have underreported their assets,” Anderson said, “and they have insurance to cover these liabilities. In all these cases, they have massive amounts of insurance.” What is not listed, he said, are the “true assets” of the real estate and investment funds under the bishop’s control.

“This lack of transparency is a real threat to child safety,” Trusha Goffe, an attorney with Jeff Anderson & Associates, said. “But survivors will still have the power to come forward and seek justice and healing.”

Mitchell Garabedian, a Boston-based attorney who represents 23 sexual abuse victims who have filed civil complaints against the Diocese of Rockville Centre, said the Chapter 11 filing would not prevent his clients from moving forward with their lawsuits. “Clergy sexual victims will now seek justice and validation through the U.S. Bankruptcy Court,” Garabedian said. “Legal discovery of secret files, names of perpetrator priests and negligent supervisors and the identity of assets will be sought through the bankruptcy court. Transparency will continue to be pursued in the bankruptcy court so that victims can try to heal.”

For some survivors, the announcement of the filing is seen as a way out. Sean O’Brien, a Rockville Centre native who attended St. Agnes Cathedral School, came forward publicly two years ago about the abuse he said he experienced by a priest in the 1980s. The IRCP gave him some validation for his claims, which he said victims who have not yet come forward, or been compensated, will be denied.

“The Diocese of Rockville Centre choosing to file bankruptcy, which serves as a way to silence victims and deny them their day in court, is cowardly, self serving and reprehensible,” O’Brien said. “Even worse, Bishop Barres portraying this as a ‘woe is me’ scenario due to the litigation costs is a sick example of victim shaming, which was put on full display in his video announcement. Make no mistake, this goes way beyond keeping a victim from having their day in court. The diocese knows that by filing bankruptcy, they avoid the specific details of the horrific abuse that victims endured, from being exposed in a trial setting. They also stand a much better chance of suppressing documents that would uncover who knew what, when they knew it, and what they did (or more importantly) what they didn’t do with that information. For decades the diocese harbored sexual predators who preyed on the most vulnerable members of the community -- young children. These predators were housed in rectories across Long Island and allowed to roam free in the community under the guise of a trustworthy servant of God. This was a disservice not only to the communities, but also to the great priests who lived out their ministries both publicly and privately as true, trustworthy servants of God. 

“The devastation that a victim of clergy-perpetrated sexual abuse experiences may start in childhood, but it certainly doesn’t end in childhood,” O’Brien continued. “It sets the stage for a life long battle emotionally, physically, spiritually and financially. It’s clear that the diocese did not want these devastating details of the victims‘ lives to be laid out for a jury. The Diocese of Rockville Centre filing for bankruptcy can be spun however they choose, but it’s very telling to me that they chose the route of shifting blame and suppressing truth.”

O’Brien added, “My thoughts and prayers go out to those victims who filed lawsuits with the hope of uncovering tightly guarded information that the Diocese of Rockville Centre has been less than forthcoming in sharing up to this point.”

St. Agnes Cathedral parishioner Ruthanne McCormack, of Rockville Centre, whose children went to St. Agnes Cathedral School and continued on to Catholic high schools, expressed sympathy with the victims and said she hopes this filing does not impact survivor reparations. “No amount of money can take away their pain,” she said, adding, “Faith is strength.”

She said that since the sexual abuse allegations came to light several years ago, the church has opened up discussions within the parish community, and she believes the priests have a greater awareness of the impact of abuse. As project coordinator for the Rockville Centre Coalition for Youth, she sees how childhood sexual abuse can lead to substance abuse.

“I feel my children are better off for the Catholic education they had,” McCormack said, “and I think the church will be better off from this. Hopefully people will heal, and hopefully they don’t look to other ways to do so.”