Buffalo Diocese seeks to transfer 35 abuse claims to Boy Scout bankruptcy plan

Oct. 12—Thirty-five Child Victims Act lawsuits against the Catholic Diocese of Buffalo may end up getting settled in federal bankruptcy court — albeit through the Boy Scouts of America's Chapter 11 plan, not the diocese's own bankruptcy process.

Lawyers for the diocese have asked Chief Judge Carl L. Bucki of U.S. Bankruptcy Court Western District of New York to let the diocese "opt in" to the Boy Scout settlement plan that was approved in September.

If approved, the move would allow the diocese to shift 35 childhood sex abuse claims — a small fraction of the more than 900 claims filed against it — onto a $2.46 billion settlement trust in the Boy Scout bankruptcy case. The diocese would transfer to the trust its insurance coverage rights under Boy Scouts of America policies. The diocese also would be granted "limited protected party" status, whereby any scouting-related abuse litigation would be on hold for at least 12 months, while the diocese negotiated an "appropriate contribution" with the settlement trust.

Channeling the 35 claims to the trust would "result in the availability of additional funds for distribution to other abuse claimants in the diocese bankruptcy case," Richard C. Suchan, chief operating officer for the diocese, said in court papers filed last week.

Participating in the Boy Scout plan "represents a fair and equitable compromise of issues" and was "in the best interest of the Diocese's estate and all of its creditors," including the 35 claimants alleging scouting-related abuse, Suchan said.

The diocese's motion highlights the layers of complexity in both bankruptcy cases.

The Boy Scouts of America faced a flood of lawsuits over childhood sex abuse, including about 200 in Western New York courts. It filed for bankruptcy protection on Feb. 18, 2020. More than 80,000 people filed sexual abuse claims in the Boy Scouts' bankruptcy case. A federal judge in Delaware approved its reorganization plan in September, although representatives from the official committee for childhood sex abuse claimants in the Boy Scout bankruptcy said the plan might not take effect for another six to 18 months.

Victims will be eligible for minimum awards of $3,500 and up to a maximum of $2.7 million, depending on the severity and frequency of abuse and other mitigating factors, including whether the abuse happened in a state with statute of limitations windows that allowed for lawsuits in sex abuse cases from many years ago, according to federal court papers.

But it's still unclear when any claim payments will go out.

The Buffalo Diocese filed for Chapter 11 protection 10 days after the Boy Scouts of America in 2020, as the number of Child Victims Act lawsuits alleging sex abuse by priests and other employees climbed into the hundreds. The diocese currently is in mediated negotiations with insurers, its parishes and schools and the committee that represents unsecured creditors, namely sex abuse claimants.

Like many religious groups, the diocese, along with its parishes and schools, for many years acted as a "chartered organization," sponsoring, hosting and otherwise supporting scouting activities offered by the Boy Scouts of America and three local councils in Western New York.

As such, it was named as a defendant in scouting-related cases.

The diocese identified 94 lawsuits that identified the diocese or a parish in a case related to the Boy Scouts of America, according to court papers.

Of those, 35 allege abuse that occurred after Jan. 1, 1976, and may be channeled into the trust, under the terms of the reorganization plan. The other 59 abuse claims allege abuse prior to 1976 and are not covered under insurance policies issued by insurance companies that have joined the settlement.

The diocese plans to address those 59 claims in its own bankruptcy case, according to court papers.

The Buffalo Diocese joined with 10 other dioceses and archdioceses and the Catholic Mutual Relief Society of America as the "Roman Catholic Ad Hoc Committee" that reached a settlement agreement last March with the Boy Scouts of America and other parties in the Boy Scouts bankruptcy, including the official committee that represents sex abuse claimants.

Bucki is scheduled to hear arguments on the diocese's motion Nov. 8.

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