Facing more than 100 child sex abuse lawsuits, diocese files for bankruptcy

OGDENSBURG, New York (WWNY) - In the wake of more than 100 sexual abuse lawsuits, the Diocese of Ogdensburg has filed for Chapter 11 reorganization.

In a letter, Bishop Terry LaValley said the reorganization is in response to the 138 lawsuits filed against the diocese under New York state’s Child Victims Act.

The act allowed victims to sue their alleged abusers for acts that were previously protected by the statute of limitations. It opened a one-year window from August 2019 to August 2020. The deadline was extended to August 2021 because of the pandemic.

The cases go back decades, from 1940 to 1990, before, the bishop says, the diocese implemented policies to keep children safe.

LaValley said the diocese faces uncertainty in how much it would have to pay in settlements and how long the process would take.

“While we have been in litigation for almost three years, the merit of the claims and amount needed to resolve them has not yet been determined,” he said.

During an afternoon news conference, LaValley was adamant that the bankruptcy decision ensures all victims receive just compensation. The diocese believes by filing for bankruptcy, it eliminates a so-called “race to the courthouse” for survivors that would eventually drain the diocese all of its resources before all cases were heard.

Lawyers representing victims of child sexual abuse across the country are crying foul.

“The Diocese of Ogdensburg’s decision to file for Chapter 11 bankruptcy is an unfortunate yet predictable attempt to conceal the truth about the diocese’s self-serving practices at the expense of child sexual abuse survivors,” the law firm of Jeff Anderson & Associates said in a statement.

“This decision is another in a long line of decisions aimed at preserving the Diocese’s frail veneer by undermining the humanity and dignity of survivors,” attorney Cynthia LaFave said.

“In declaring bankruptcy, the Diocese knowingly obstructs survivors’ long-awaited opportunity to say their piece; to be heard, to be acknowledged,” LaFave said. “Make no mistake, silencing survivors is exactly what the Diocese has always done.”

Fourteen cases have been either settled or dismissed, the bishop said, leaving the diocese facing another 124.

As of December, the diocese had identified 30 priests that a review board found “reasonable grounds” they had committed sexual misconduct. Another priest, not on the diocese’s list, was named in a lawsuit filed in June of 2020.

The diocese had considered filing for bankruptcy as far back as February 2020.

LaValley said the reorganization “ensures that each survivor receives just compensation,” eliminating “a race to the courthouse” that would drain the diocese’s resources before all cases could be heard.

“Filing for reorganization does not hinder claims filed by victims of sexual abuse,” the bishop said. “Rather, it establishes a process for all claims to be treated fairly.”

Reorganization allows the diocese to settle all the claims in one court “in an efficient and timely manner.”

He said the reorganization won’t otherwise affect the way the diocese operates.

The diocese’s lawyer, Charles Sullivan, says in the near future, he expects Judge Patrick Radel with the U.S. Bankruptcy Court Northern District of New York to allow survivors to file claims for the case. Then, he says the diocese will ask the judge to refer the key disputes to mediation, where a committee will be formed to find an equitable resolution for all those who have filed.

Five of the state’s eight dioceses — Buffalo, Rochester, Rockville Center, Syracuse, and Albany — have already filed for bankruptcy.

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