THE WAY FORWARD

Although the Diocese of Albany remains committed to the healing of all victim-survivors affected by the scourge of clergy abuse, bankruptcy remains a real possibility.

“While we have been earnestly working with mediators and plaintiff attorneys for a global settlement in order to give the most financial assistance to victim-survivors in the shortest time possible, sadly, if this settlement is not reached, our only other remedy may be to file for Chapter 11 reorganization.” the Diocese said in a statement to The Evangelist.

The Diocese has been in mediation for the past several months with plaintiffs’ attorneys as both parties attempt to settle the hundreds of abuse cases filed under the Child Victims Act. Many questions remain, though, ones that you may hear in the pews before Mass or at coffee hour after the liturgy. 

This story is a means to update all the faithful in the Diocese as to where everything stands from mediation and settlements, to the potential of bankruptcy as well as the work of the Hope and Healing Committee. It is meant to be as transparent as legally possible.

MEDIATION

The Diocese of Albany has been named in more than 400 Child Victims Act (CVA) lawsuits along with other religious orders and institutions as co-defendants which were filed between Aug. 15, 2019, and Aug. 14, 2021. The CVA in New York State opened a lookback window in which alleged victims of sexual abuse by any entity could seek financial redress for time-barred claims. 

Bishop Edward B. Scharfenberger has remained committed that mediation — not bankruptcy — is the best path for survivors. “We maintain mediation would provide the most equitable distribution of the Diocese’s limited financial resources,” said Bishop Scharfenberger. “Mediation would also limit the attorney’s fees so more of those limited resources get to survivors.”

To that end, the Diocese released a draft of a mediation proposal on July 7, but the plaintiffs lawyers - guided by a Plaintiff Liaison Committee (PLC) - said it would take the power away from victim-survivors. On July 13, the PLC rejected the Diocese's plan, and moved ahead with a standard mediation/arbitration plan for victim-survivors, which was also agreed to on behalf of the Diocese by long-time diocesan counsel Michael Costello. 

The Diocese and plaintiff attorneys agreed on July 13 that Simone Lelchuk, a New York City attorney and a full-time mediator since 2014 who has worked with sexual misconduct funds and with sexual assault victims/survivors, and Paul Finn, who mediated the 552 claims of alleged victims of sexual abuse by priests from the Archdiocese of Boston, would act as co-mediators.

Once a month, Costello and the PLC - most notably Jeff Anderson, Cynthia LaFave and Mitchell Garabedian - meet via Google Zoom to provide State Supreme Court Judge L. Michael Mackey with updates and concerns. The calls are open to the public and two Evangelist reporters - Emily Benson and Mike Matvey - have attended the last four sessions, which usually take place on a Friday. 

On Oct. 14, in the 24-minute meeting, Costello spoke of the continued need for urgency during the mediation process and reaffirmed the Diocese's dual goal “of a fair and timely resolution” for the survivors while acting in good faith. It was also announced that the Berkeley Research Group (BRG) would be asked to evaluate the assets of the Diocese. Anderson added BRG first worked with the Diocese of San Diego in 2004 in determining their “ability to pay.”

The mediation process would establish a fund. The fund would receive contributions from the Diocese, its insurers and co-defendant parishes. This “global fund” would then be used to settle the claims. The size of the fund or levels of contributions have not yet been determined. 

SETTLEMENTS

The Diocese, in collaboration with its insurance carriers, has recently settled through mediation four claims involving five plaintiffs - for roughly $3 million in total - that were set to go to trial. The Diocese currently has no more trial dates set for this year, but has a trial date every month next year starting in January. Due to confidentiality, the Diocese cannot legally release information about the settled cases, but the plaintiffs can. The Diocese has settled several, additional cases not on the trial calendar with the mediation assistance of Justice Mackey

In July, the Times Union first reported that the Diocese had reached a $750,000 settlement with Stephen Mittler, who alleged that former Albany priest Mark Haight had abused him for over a decade. After the settlement, Mittler reached out to Bishop Scharfenberger to take him up on his offer to “walk with survivors” at Corpus Christi Church in Round Lake, where the abuse allegedly began. Bishop readily agreed to the historic meeting on July 31 where he talked with Mittler privately in the church and then with the assembled media outside. 

BANKRUPTCY

Four dioceses in New York State — Rochester (September 2019), Syracuse (June 2020), Buffalo (February 2020) and Rockville Centre (October 2020) — have declared bankruptcy since 2019. In all of these cases, the legal wrangling is still going on with millions going to lawyers and consultants during the process. The Diocese of Buffalo, according to numerous media reports, has spent over $7 million just on lawyers since it filed for bankruptcy, with none of that money going to victim-survivors. The sheer number of lawsuits filed before the CVA window closed — 950 in Buffalo, 500 in Rochester, nearly 400 in Syracuse — adds to the daunting task of trying to negotiate a financial settlement.

The Catholic Courier, the official newspaper and website of the Diocese of Rochester, has compiled a very instructive timeline on its bankruptcy and that timeline could be a look into what the Diocese of Albany and the victim-survivors are in store for under Chapter 11. The entire timeline can be found at: catholiccourier.com/articles/diocese-of-rochester-bankruptcy-timeline, but here are some of the highlights: Sept. 12, 2019: Diocese files for bankruptcy. Feb. 25, 2020: U.S. Bankruptcy Judge Paul R. Warren appoints Nevada bankruptcy Judge Gregg W. Zive as mediator and sets an Aug. 13, 2020, deadline for submitting claims in the bankruptcy case. May 27, 2021: The diocese asks the court to approve a $35-million settlement with two of its insurers. July 9, 2021: Warren denies request. May 20, 2022: The diocese files a motion for approval of $107.25 million in insurance settlements to be combined with a $40.5-million contribution from the diocese, parishes and affiliated organizations for a $147.5-million Survivor Compensation Trust. June 30, 2022: The survivors’ committee files an objection to the $147.5-million proposed settlement. July 22, 2022: The diocese files objections to 74 claims arguing that the diocese cannot be liable for alleged abuse by persons or entities who were not under the control or direction of the diocese. January 2023: Hearings on the diocese’s motion seeking approval of negotiated settlements with insurers combined with diocesan/parish contributions to fund a $147.5-million trust for compensation of abuse survivors.

The $147.5 million figure brings up another question: What could the Diocese of Albany and its insurers be liable for in regards to the “fund?” In April, the Diocese of Camden (N.J.) agreed to pay nearly $88 million to settle over 300 alleged abuse cases, which averages to $293,000 per claimant. The mediation process will determine the participatory contributions to the Albany Diocese fund and claim criteria.

Another key point about Chapter 11 is that if the Diocese were to file, all litigation against it — not just CVA cases — would be suspended and everyone seeking financial relief would have to get in a very long line. This would directly affect the nearly 1,100 St. Clare’s Hospital employees who allege they lost their retirement benefits because of actions by the Diocese. 

On May 24, New York attorney general Letitia James filed a lawsuit against the Diocese on behalf of the retirees. The suit alleges that the “the St. Clare’s Corporation … unanimously voted to terminate the pension and dissolve the Corporation. In the petition for dissolution, filed with the court in 2019, the Corporation admitted that it owed more than $50 million to the retirement plan and its members and had no means or intention to fully fund the pension.”

HOPE AND HEALING COMMITTEE

The Diocesan Hope and Healing Committee has been listening to survivors willing to share their stories and advice on how the Catholic Church can help. Members of the committee include: Kathy Barrans, director of communications, Father Robert Longobucco, pastor at St. Kateri Tekakwitha Parish and Vicar General, Deacon Gary Riggi, Ann Marie Carswell, process coordinator for Diocesan Review Board and Assistance Office, Frederick Jones, Diocesan Assistance Coordinator, Father Matthew Duclos and Mary Fay, associate director for Marriage Formation Ministry and Family Life Coordinator of Pastoral Care Ministries.

The committee is fostering a series of Hope and Healing Masses, building on previous healing services offered by the Diocese. The first Mass takes place Sunday, Oct. 23, at 10:30 a.m. at St. Gabriel’s Church in Rotterdam. A gathering will follow Mass, giving people an opportunity to share their needs and concerns. As Bishop Scharfenberger wrote in his message to the faithful last week, “The Church has not always been proactive and responsive to the needs of people (suffering from brokenness, trauma and abuse). Despite our past faults, we are looking to extend Jesus' invitation to each person in our Diocese.”

The committee has also launched a new page on the diocesan website https://www.rcda.org/hopeandhealing which includes resources, contact information and details on upcoming Masses and events.