Q: What does it mean when a Diocese or other institution files bankruptcy?
A: Chapter 11 reorganization is a voluntary legal process in which a debtor seeks to reorganize itself financially under court supervision. Usually a Chapter 11 debtor does not sell or “liquidate” everything they have to pay creditors (as is common in Chapter 7 bankruptcy). Chapter 11 reorganization allows a debtor to continue its ordinary operations while the bankruptcy process unfolds.
Q: Why would the Diocese file for bankruptcy?
A: When a Diocese files for Chapter 11 protection, all legal actions against the Diocese and collection efforts brought by creditors are immediately paused through something called the “automatic stay.” This mandatory “pause” includes all lawsuits brought against the Diocese for childhood sexual abuse. So by filing for bankruptcy, the Diocese can get a break from the lawsuits against it. Then, once in bankruptcy, the Diocese can try to negotiate a large, global settlement of all claims against it.
Q: Does the bankruptcy mean the Diocese has no assets?
A: No, the bankruptcy does not mean that the Diocese has no assets or that survivors will receive no compensation. The first step in the bankruptcy is to determine what assets the Diocese has to compensate survivors, including cash, property, and insurance.
Q: Have other Diocese filed for bankruptcy? If so, what has been the result?
A: Yes, as of January 2021, twenty-nine Diocese had filed for bankruptcy. Several have been resolved and each has resulted in monetary settlements to survivors. The size of the settlements has varied due to the amount of the Diocese’s assets, the number of claims submitted, availability of insurance coverage, and other factors.
Q: How long do I have to decide if I want to file a claim?
A: The deadline to file a claim has passed. In our case, survivors were required to file a claim in the bankruptcy by the court-ordered deadline of April 15, 2021.
Q: Can I remain anonymous if I choose to file a claim?
A: Yes. Your identity will be kept confidential.
Q: Do I need an attorney to represent me in the bankruptcy case?
A: You may choose to retain an attorney to assist you; however, it is not a requirement.
Q: If I did not file a claim by the deadline of April 15, 2021, can I still do so?
A: While the deadline to file claims in this case was April 15, 2021, and it is unclear if the Court will allow late-filed claims, survivors who have not yet filed a claim can still submit a late-filed claim and make a request that the Court allow their claim. When submitting a claim please be sure to provide as much detail as possible so that the claims reviewer has all of your information. In most bankruptcy cases filed by the Catholic dioceses, special claim forms are approved. You should submit your claim on that special claim form. The claim form for this case is available here: Proof of Claim Form. The procedures for filing a proof of claim can be found here: Claim Filing Procedures. For assistance in getting a hold of the claim form, or if you have other questions, you can contact paralegal Jessica Rehbein at 612-335-1831. Please understand that Ms. Rehbein is not an attorney and cannot provide legal advice or represent you in the case.
Q: If the diocese or another institution files for bankruptcy, can I still obtain documents and information on the perpetrator who sexually abused me?
A: Usually. In prior bankruptcies, survivors have negotiated non-economic settlement terms and disclosures as part of the reorganization plan. Although documents may ultimately be released as part of a reorganization plan, all documents obtained during the bankruptcy by the Committee must remain confidential during the bankruptcy case.
Q: If I file a claim, will the Diocese and its Parishes and Schools be forced to close?
A: This has not happened in any Diocesan or religious order bankruptcies to date.
Q: Where can I find information on the Chapter 11 case?
A: Bankruptcy filings are public and are accessible on the Bankruptcy Court’s website at: https://pacer.uscourts.gov/ and at https://case.stretto.com/DioceseofSyracuse.
Q: How will survivors be compensated?
A: A “Survivors’ Committee” is created at the beginning of the bankruptcy case to represent survivors of sexual abuse throughout the Diocese’s bankruptcy. That Committee is made up of people who are survivors of sexual abuse themselves, so they are very empathetic and focused on helping survivors. The Committee is permitted to hire attorneys and other professionals and the bankruptcy estate (the Church) has to pay for the related fees and costs of those professionals. Through its attorneys, the Committee attempts to negotiate a settlement with the Diocese that recovers as much money as possible to pay survivor claims and the Committee also negotiates child protection requirements to ensure that children are protected from abuse going forward. All of these negotiated terms are presented to the Court and creditors through something called a Plan of Reorganization and all creditors (including survivors) have a chance to review that document and vote for or against it. The Survivor Committee will also appoint a claims reviewer, who will review the survivor Proofs of Claim and allocate points based on guidelines that are written by survivors on the Committee and outlined in the Plan documents.
Q: When will survivors received compensation and how much will they receive?
A: Unfortunately, an exact timeline cannot be predicted. But once a reorganization Plan is confirmed by the bankruptcy court, the trustee and claims reviewer, working independently from the Diocese, will determine the amount of compensation each survivor will receive based on guidelines written by survivors and approved by creditors through voting on the Plan (for more information on the Plan process, see the FAQ directly above this one).
Q: Where will the funds from the settlement come from?
A: Typically, the settlement will be funded through a combination of Diocesan assets, insurance settlements, and contributions from parishes within the Diocese.
Q: Will donations to the Diocese, Parishes, or Schools be used to pay survivors?
A: Donations to the Diocese that the donor restricted for a specific purpose, such as for a specific ministry or program are held by the Diocese solely for that purpose. Such funds are typically not used for any other purpose.
Q: How long does reorganization under a bankruptcy take?
A: There is no preset length for a bankruptcy and in many Diocese cases the proceedings can take multiple years. It is in the Diocese best interests, however, to minimalize the length of time that the Diocese is in bankruptcy. The Survivors Committee understands that this process can seem agonizingly slow at times, and may be re-traumatizing. It is committed to doing its work as quickly as possible but is also limited by hearing dates and the bankruptcy process. The Committee has included a list of mental health resources here and encourages Survivors and their families to reach out to them if needed.
Q: Should I report my sexual abuse to law enforcement?
A: Survivors are encouraged to report any sexual abuse by anyone involved with the Diocese, regardless of when the abuse occurred.