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Diocese of Rochester files Chapter 11; not ruled out for Diocese of Buffalo


The Diocese of Rochester, which faces dozens of lawsuits filed under the Child Victims Act, filed for Chapter 11 Bankruptcy protection Thursday morning. Bishop Richard Malone, in his most recent public comments, revealed it's an option still under consideration for the Diocese of Buffalo.

Bishop Malone, while hosting his news conference inside the Rectory adjacent to St, Joseph's Cathedreal in downtown Buffalo last week, admitted Chapter 11 was still on the table and a choice some of his fellow bishops among the eight dioceses of New York State were considering.

The Diocese of Buffalo is facing more than 100 lawsuits filed by plaintiffs claiming they were past victims of sexual abuse by clergy.

"We're looking at litigation and at the possibility of bankruptcy, or Chapter 11 reorganization as we like to use the euphemism for it, which is as you know a structure and strategy that helps the mission of the Church to go forth securely," said Bishop Malone at his September 4 news conference. "Right now it's the honest truth. We're looking at both of those very, very closely and carefully. I have not yet made a decision. There are people arguing both positions."

Thursday afternoon, WBFO received this message from the Diocese in response to our question whether the Diocese of Rochester's action may influence or hasten a decision in Buffalo: "Like every Diocese in the State of New York, the Diocese of Buffalo is consulting financial experts, insurance carriers and working with our Finance Council to review the options available to fairly address the lawsuits filed by survivors and to continue our mission as a Diocese."

James Faluszczak, a former priest and abuse victims turned advocate for other clergy sex abuse victims, believes the Diocese of Buffalo will ultimately follow the same path as the Diocese of Rochester.

"Yes. We sort of expect it," Faluszczak said. "I certainly hope, with everything else tarnishing his legacy at this point, would choose not to do that."

Faluszczak also suggests the Diocese of Buffalo, by not planning a second round of the Independent Reconciliation and Compensation Program, was hinting previously that bankruptcy might be in their plans. Bishop Malone, last week, explained the diocese has not pursued further rounds of the IRCP in order to have funds available in anticipation of lawsuits. 

But Faluszczak and other critics of how the Catholic Church has managed claims against them believe bankruptcy is now the strategy that they'll use to keep information about abuse allegations under wraps.

"The bishop’s choice to use reorganization as a legal tactic is very disturbing and disappointing," said attorney Jeff Anderson of Jeff Anderson & Associates, in a prepared statement. "Bishop Salvatore Matano’s choice is simply a legal tactic to protect assets and prevent jury trials, and an attempt to prevent the truth from being revealed."

Attorney Mitchell Garabedian, who represents dozens of clients pursuing Child Victims Act, suggests what bankruptcy will not do is prevent victims from seeking justice.

"The Chapter 11 bankruptcy filing by the Diocese of Rochester will not prevent victims from pursuing their rights through the bankruptcy proceeding against the Diocese of Rochester to obtain information about sexual abusers and their complicit supervisors, against relevant parish corporate entities who have not filed for bankruptcy protection and from obtaining information about assets and insurance coverage," said Garabedian in a written statement. "The victims will become creditors of the bankruptcy estate created by the Chapter 11 bankruptcy filing."

Faluszczak, when asked about skeptics who suggest plaintiffs are merely looking for a big payday, told WBFO victims are not looking to profit but, rather, are seeking compensation for something that was lost.

"It's not a get-rich-quick opportunity. What I do hear constantly is that victims want to see the histories of their perpetrators and their own experience brought into the light of day. Whether they file under their own name or under a John Doe, that's what they're looking for more than anything."

Bishop Malone, while discussing financial options at his September 4 news conference, added that the diocese was looking into which sex abuse claims may be eligible for insurance coverage under a policy held by the diocese and whether some might actually be eligible for coverage under policies held by individual parishes. He referred to it as "insurance archaeology."

Anderson, at a Thursday afternoon news conference in Rochester, suggested churches and their ministries should not be adversely affected by ongoing civil actions against the diocese. He stated every diocese in New York State has insurance coverage and in most cases he has previously settled, more than 90 percent of those settlements were paid for through that coverage.

"In none of those cases, have they shut down or had to shut down any of the good work that they do, because they do good work," Anderson said. "Don't get the impression or let them lead you to have the impression, or any survivors have the impression, that any of the good work they do will in any way be impaired. It never happened and it won't happen here."

Michael Mroziak is an experienced, award-winning reporter whose career includes work in broadcast and print media. When he joined the WBFO news staff in April 2015, it was a return to both the radio station and to Horizons Plaza.
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