Diocese to pay $55M to abuse survivors

Hundreds of people who say they were sexually abused by Rochester-area priests have agreed to a financial settlement with the Diocese of Rochester.

The settlement will create a trust for the benefit of roughly 475 individuals who filed claims against the Diocese as part of its bankruptcy case. The Diocese, parishes and related entities will pay $55 million to the trust along with the rights to the Diocese's insurance policies. Many of the survivors will be able to pursue their claims in court in order to recover proceeds from those policies.

The amount of money to be paid by those insurance companies has been the subject of intense and at times heated negotiations.

In May, the Diocese asked a federal bankruptcy judge to approve an agreement with its insurance carriers to provide $107.25 million to settle all claims. Survivors blasted the proposal, saying the figure was far too low.

The proposed settlement would allow the Diocese to emerge from bankruptcy, a process that began more than three years ago. And it will allow abuse survivors to press their claims against those insurers in court.

The Diocese of Rochester includes 12 counties, stretching from Rochester through the Finger Lakes and into portions of the Southern Tier.

"This was a long and difficult fight, but the terms of this new proposal are a validation of the hundreds of child abuse claims that this Diocese and its parishes are facing," said attorney James Marsh. "This Diocese does not have the same amount of available assets as others, but it is paying a substantial amount of what it has."

In exchange for the settlement payment, the Diocese will receive a discharge in bankruptcy, and its parishes and affiliates will be released of their liabilities for the sexual abuse claims. Individuals accused of abuse and non-Diocesan organizations, such as religious orders, are not included in the settlement.

A committee representing all of the Diocese's creditors, mostly abuse survivors, negotiated the settlement with the Diocese.

"The settlement is the result of the Committee's hard work and tenacity," said Jim Cali, an abuse survivor and Chairman of the Creditors' Committee. "The courage and faith of Rochester's survivors empowered the Committee to stand up and negotiate a settlement on our terms."

The settlement still needs to be approved by the bankruptcy court and voted on by the approximately 475 survivors in the case. That process is expected to take about six months.

Survivors say they are happy to reach an agreement with the Diocese, but know their journey toward justice is not over.

"The bankruptcy case has lasted a long time, and the Diocese's insurers still have not stepped up to provide an adequate recovery for survivors," Cali said. "This settlement will allow survivors to take control of the process and pursue financial recoveries from the insurers that are acceptable to us."

Cali's attorney, Leander James, who has helped broker bankruptcy settlements nationwide on behalf of abuse survivors said today's court filing was a long time in the making, with many abuse victims waiting decades to be heard and see some measure of justice.

"This is a historic day with a historic deal," said Jeffrey Anderson, whose law firm represents 175 of the claimants against the Rochester diocese. He said the agreement also calls for non-monetary commitments from the Diocese, such as child protection measures and disclosure of secret documents.

Lawyers for the victims had harsh words for the Diocese's insurance companies, who they say have sought to avoid their financial obligations in this case.

"The survivors in the Diocese of Rochester are blazing a trail by first exposing perpetrators of child sexual abuse and now exposing an insurance industry that refuses to honor its obligations." said attorney Steve Boyd.

Bishop says settlement represents fairest approach for survivors

In a letter to parishioners Thursday, Bishop Matano renewed his apology to the survivors of sexual abuse.

"The history of sexual abuse of children in our Church has caused tremendous pain, hardship, alienation, and understandable anger. It seriously has impacted survivors, their families, our priests and others in diocesan ministries who had no part in these egregious acts," Matano said. "This chapter in the life of our Church has also impacted everyone who has felt their own faith shaken by those who violated a sacred trust to protect the vulnerable and live according to the teachings of Jesus Christ."

Matano said that he had hoped at the outset that individual parishes would not be affected by the bankruptcy process, but that things had changed during the three-year process. Litigation costs and settlements or jury awards would have far exceeded the resources which the Diocese and parishes have or could obtain to settle or litigate these claim, Matano said.

"We believe that this [agreement] represents the fairest approach for the survivors and most viable path forward for the Diocese and its related Catholic entities to continue our shared mission of healing and reconciliation."

Bishop Matano submitted his resignation to Pope Francis in September 2021. Canon law requires Bishops to do this when they reach 75 years of age. In a letter to parishioners announcing the milestone, Matano said he hoped to continue serving until the bankruptcy process had concluded, "thereby relieving my successor of this painful situation."

It was not immediately clear how the announcement of the settlement might affect Matano's tenure in Rochester.

The Diocese of Rochester filed for bankruptcy protection in September 2019, a move that was prompted by the swell of legal claims brought by survivors of child sex abuse. The diocese's purpose in filing Chapter 11 was to pull together funds to pay abuse claimants while the diocese retained enough assets to continue operations.

Rochester was the 20th American Catholic diocese to follow this path, all of them driven there largely by litigation over sexual abuse. Seven other dioceses have filed for Chapter 11 protection since Rochester, including the dioceses in Buffalo, Syracuse and Rockville Centre, Long Island.

Contact reporter Sean Lahman at [email protected]. Follow him on Twitter @seanlahman.