Diocese reorganization plan starts path toward exit from Chapter 11

The Buffalo Diocese’s first reorganization plan, filed late Wednesday in federal bankruptcy court, contained no major surprises but marked a key milestone in the diocese’s efforts to exit Chapter 11 proceedings.

The reorganization plan and disclosure statement reiterated the diocese’s intention to settle 891 sex abuse claims with $150 million in diocese, parish and Catholic affiliate entity funds. In addition, three settling insurers have agreed to pay $123.9 million, bringing the total amount of a settlement fund for abuse claimants to $273.9 million.

“Since becoming bishop nearly five years ago, I have continued to assert that we have no higher priority than to work toward the healing of those who have been harmed spiritually, mentally and physically by the crime of sexual abuse, and to provide some semblance of justice and closure,” said Bishop Michael W. Fisher in a statement. “This plan represents our best effort to deliver on that priority, as we also work to define a new, more hopeful era of Catholic faith and impact across our region.”

Abuse claimants would agree to relinquish their rights to sue the diocese, parishes, Catholic affiliates and the settling insurers, under the terms of the plan.

Buffalo Diocese Bishop Michael Fisher

The Buffalo Catholic Diocese has filed its reorganization plan in its ongoing Chapter 11 bankruptcy case.

The reorganization plan states that abuse claimants and other diocese creditors will end up with a much better deal through Chapter 11 than if the case were converted to a Chapter 7 liquidation, and it encouraged claimants to vote in favor of it.

Diocese sought $15M from foundation for settlement. It said no, even though its chairman is the bishop

A dispute has erupted over whether a Catholic foundation will pay $15 million to the Buffalo Diocese to help it fund a sex-abuse settlement.

A vote could take place in early 2026, although it’s likely the reorganization plan will be revised. Ultimately, Chief Judge Carl L. Bucki of U.S. Bankruptcy Court for the Western District of New York must confirm the plan for the diocese to reorganize and exit Chapter 11.

The diocese is still in the process of securing the $150 million it needs to fulfill the terms of a settlement in principle reached in April with the Official Committee of Unsecured Creditors, which represents the abuse survivors.

Diocese officials in the spring said $80 million of the $150 million will come from the unrestricted cash and savings of the 159 Catholic parishes in eight Western New York counties. The amounts that individual parishes were being asked to contribute toward the settlement varied widely, from less than $10,000 to more than $5 million, sparking outrage among parishioners in churches with the highest contribution amounts.

The total amount expected from the parishes has since been adjusted downward to $76 million, about two-thirds of which already has been collected and set aside for the settlement trust, according to diocese spokesman Greg Tucker.

The disclosure statement shows the diocese has about $5.8 million in cash, $19.4 million in unrestricted investment funds and multiple properties estimated to generate a total of $22.6 million in net proceeds from their sales. Diocese officials have said in the past that about 80% of diocese unrestricted cash and assets would be used toward settlement.

The statement doesn’t provide any further details about how the diocese is getting the $150 million, aside from a line stating it may need to take a loan of up to $25 million.

In addition to the parish money, the diocese was seeking at least $10 million from Catholic affiliates, including Catholic Charities, Catholic Cemeteries and Our Lady of Victory Charities.

The diocese’s efforts to get help from the Foundation for the Roman Catholic Diocese of Buffalo, a separate charitable organization with more than $70 million in assets, so far have been met with resistance.

The foundation’s board rejected a diocese request in 2024 for $15 million toward the settlement, and this past June, the board adopted a policy to refuse “any present or future requests” for funding a settlement from the foundation’s unrestricted assets.

Tucker said diocese officials were continuing to work with affiliate entities “in defining appropriate contribution levels from unrestricted resources.”

The disclosure statement revealed a host of cost-saving measures adopted by the diocese since it filed for Chapter 11 protection on February 28, 2020.

Those measures include:

• The closing of a priest retirement home, along with plans to close a second priest retirement home in 2026, with a projected savings of $700,000 per year.

• Reduced annual operating expenses and losses of $3.7 million in health and insurance programs.

• The elimination of 40% of diocese workspace, resulting in annual savings of about $4 million.

• Layoffs of 22% of diocese central office staff, about 18 positions total.

Judge dismisses parishioner lawsuits against Buffalo Diocese

State Supreme Court Justice John J. DelMonte on Friday dismissed two lawsuits brought by Catholic parishioners who wanted a court order blocking their parishes from contributing to a $150 million settlement with child sex abuse victims.

The disclosure statement included a summary of the diocese’s Road to Renewal, an ongoing parish consolidation effort that has irked many Catholics who don’t want their parishes merged and churches closed.

The statement noted an aging donor base, declining engagement among young Catholics and the looming financial impact of the Chapter 11 case as major “trends of concern” prompting the need for a massive overhaul of the diocese’s parish structure.

“The sad reality is that the Church will be poorer, smaller, and less financially influential in the near future because of the change in demographics and the cost associated with Chapter 11. In preparation for this certain eventuality, communities need to be united and strengthened that they might not scatter,” the statement said. “In the final analysis, the Road to Renewal is a program that looks toward the future and attempts to put the diocese in the best possible position to respond to the pastoral needs of this portion of the People of God.”

Two of the diocese’s largest insurers, Wausau and CNA, had agreed in August to settle. The disclosure statement showed a third insurer, AIG, has also joined the settlement, agreeing to pay $1.4 million. Several other insurance companies have yet to settle.

If they do settle later on, the total trust amount could grow even larger.

If they don’t, the reorganization plan would assign to the settlement trust insurance claims held by the diocese or parishes, allowing for “post-confirmation litigation” to seek recovery from non-settling insurers.

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