Diocese of Rochester bankruptcy timeline - Catholic Courier

Diocese of Rochester bankruptcy timeline

Feb. 14, 2019: Then-Gov. Andrew Cuomo signs into law the Child Victims Act, which will open a one-year “window” (later extended for a second year), providing survivors of child sexual abuse the opportunity to file civil suits previously blocked by New York’s statute of limitations.

March 14, 2019: As the Aug. 14 opening of the CVA window nears, the diocese announces it will stop accepting new claimants into a voluntary process established in March 2018 for the independent reconciliation and compensation of sexual-abuse victims.

Sept. 12, 2019: With 45 lawsuits filed against it in less than a month since the CVA window opened, the diocese files for bankruptcy. The case is assigned to U.S. Bankruptcy Judge Paul R. Warren.

Nov. 14, 2019: The diocese files a lawsuit seeking to establish that its insurers must cover potential liabilities related to historical claims of child sexual abuse.

Dec. 23, 2019: The diocese asks Judge Warren to order mediation with the insurers and the committee representing survivors.

Feb. 25, 2020: Judge Warren appoints Nevada bankruptcy Judge Gregg W. Zive as mediator and sets an Aug. 13, 2020, deadline for submitting claims in the bankruptcy case. The availability of bankruptcy claim forms is widely publicized.

Aug. 13, 2020: Nearly 500 abuse claims are filed prior to the deadline. With the scope of claims against it established, the diocese begins mediation negotiations with its insurers and the survivors’ committee.

May 27, 2021: The diocese asks the court to approve a $35-million settlement with two of its insurers. About two weeks later, the survivors’ committee asks the court to allow a test group of sexual-abuse lawsuits against the diocese to proceed in state court.

July 9, 2021: Warren denies both requests, He orders all parties back to mediation, admonishing them to “wipe the slate clean and participate in the mediation with fresh eyes, fresh attitudes and minds open to and intent on reaching a global resolution.”

March 2022: The survivors’ committee refuses to extend a standstill agreement staying the prosecution in state court of sexual-abuse lawsuits against parishes, schools and other Catholic institutions.

April 6, 2022: The diocese files an adversary proceeding, asking the court to enforce a stay of state litigation against parishes, schools and other Catholic institutions.

May 20, 2022: Diocese of Rochester files a motion for approval for authorization to enter into proposed settlements providing a total of $107.25 million from four insurers:  LMI ($16.65M), Interstate ($26M) Underwriters ($1.1M), and CNA ($63.5M) to be combined with $40.5 million from the diocese, parishes and affiliated entities to fund a $147.75 million compensation trust for sexual-abuse survivors. 

May 23, 2022: Judge Warren denies the diocese’s request to stay abuse litigation against parishes, schools and other Catholic entities; the diocese files notice of its intent to appeal the ruling.

June 30, 2022: The Official Committee of Unsecured Creditors objects to the diocese’s insurance settlements, claiming that such settlements “are too low and do not provide sufficient consideration for the insurers’ exposure based on the value of the claims and the amount of available insurance.”

July 8, 2022: Judge Warren appoints Paul Van Osselaer, a full-time mediator and arbitrator specializing in insurance coverage, to serve with Judge Zive as additional mediator. Sessions take place in late July and August.

July 22, 2022: The diocese files objections to 74 claims, primarily on the basis that such claims assert wrongful acts by entities that are not subject to the supervision or control of the diocese.  The objections remain pending but have not been heard by the court.  The objections will be withdrawn if the Joint Plan proposed by the diocese and the creditors’ committee (see entry for March 24, 2023) is confirmed.   

Oct. 7, 2022: Diocese seeks court authorization to elect treatment as a participating chartered organization in the Boy Scouts of America’s Chapter 11 plan. Such authority was granted by the court on Nov. 10, 2022, and later exercised by the diocese. 

Nov. 3, 2022: Diocese seeks approval of a Restructuring Support Agreement with the creditors’ committee. The RSA calls for the diocese, parishes and certain related organizations to contribute an increased amount of $55 million and to assign their insurance rights to a trust for benefit of abuse survivors.   

Jan. 11, 2023: U.S. Bankruptcy Judge Paul R. Warren joins court-appointed mediators at a settlement conference involving the diocese, creditors’ committee and insurers, along with the U.S. Trustee’s Office.

Late Jan. 2023: The creditors’ committee agrees to accept the $1.1M insurance settlement proposed by Underwriters and an increased $19.5M settlement offer from LMI. 

March 23, 2023: CNA files additional objections to nearly 40 claims.  The Committee opposes these claim objections by filing a motion to dismiss on April 11, 2023.

March 24, 2023: In conjunction with the creditors’ committee, the diocese files a Joint Chapter 11 Plan for Reorganization, along with a disclosure statement in support of the plan.

April 7, 2023: Diocese files a motion for approval of disclosure statement, solicitation packages, distribution procedures, as well as for scheduling of certain key dates related to the Joint Plan.

May 15, 2023: Court indefinitely adjourns several matters, including the committee’s motion to dismiss the CNA claim objections, while mediation efforts continue.  

Mid-June 2023: The diocese, creditors’ committee, and Interstate reach an agreement in principle on an increased $50M settlement offer from Interstate.     

July 21, 2023: Diocese files a status report on negotiations, noting that four insurers have now agreed to settlements in amounts acceptable to the committee, but that no such agreement has been reached with CNA. 

Aug. 22, 2023: Creditors’ committee files a motion seeking authority to sue CNA for what the committee alleges to be deceptive conduct, unfair trade practices, and other violations of New York law in connection with CNA’s handling of the diocese’s insurance claims. 

Aug. 31, 2023: CNA files a competing Chapter 11 plan for reorganization of the diocese, in which CNA proposes to contribute $75 million to the survivors’ trust.   

Oct. 2, 2023: CNA files a disclosure statement in support of its plan.

Oct. 30, 2023: Creditors’ committee files a motion to deny the diocese’s request for authorization to enter into the insurance settlement agreements first proposed in May 2022, arguing that such request is now moot in light of the revised settlement figures subsequently agreed to with LMI and Interstate, and of CNA’s filing of a competing plan that provides for CNA to pay $11.5 million more than the amount contemplated in CNA’s prior proposed settlement agreement.

Nov. 7, 2023: CNA files a complaint and application for allowance and payment of administrative expense priority claims, arguing that the diocese “reneged” on the proposed May 2022 settlement with CNA for which the diocese sought — but never obtained — court approval.

Dec. 5, 2023: The diocese and creditors’ committee file objections challenging the accuracy and adequacy of disclosure set forth in CNA’s disclosure statement.  CNA similarly files an objection to the diocese’s disclosure statement, and the U.S. Trustee files objections to both disclosure statements.

Dec. 22, 2023: The diocese and creditors’ committee move to dismiss CNA’s adversary complaint relating to the May 2022 proposed settlement agreement and object to CNA’s motion for an administrative claim, both arguing that CNA’s allegations are legally insufficient to justify its claim. 

Jan. 3, 2024: Declining to approve either disclosure statement, the court orders certain revisions, including “plain English” explanations of both plans.

March 1, 2024: Court denies motions from the diocese and creditors’ committee to dismiss CNA’s adversary complaint on purely legal grounds noting that, at this early pleading stage the court “is not tasked with deciding whether CNA or the Diocese will ultimately prevail in this litigation but whether CNA is entitled to offer evidence to support the claims.”

April 16, 2024: Court conditionally approves disclosure statements for both plans with minor additional revisions.  The Court also sets July 29, 2024, as the start of a trial on the merits of CNA’s adversary complaint and administrative expense claim.

April 29, 2024: Court enters an order officially approving both disclosure statements, setting July 1, 2024, as the deadline for creditors to vote to accept or reject the plans, and setting a hearing for September 3, 2024, to consider confirmation of a plan if one or both plans have received sufficient creditor support. 

This timeline was updated May 15, 2024.

Tags: Diocesan Bankruptcy Updates
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