Those who Want to File a Civil Lawsuit Under the Child Victims Act May Not Have as Much Time as They Anticipate

Thank you to James R. Marsh, Partner, Marsh Law Firm, PLLC, for allowing us to share this important information. 

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The Diocese of Rochester Filed for Bankruptcy 
On September 12, 2019, the Diocese of Rochester filed for bankruptcy.
 
What Does a Bankruptcy Mean for Abuse Survivors?  
Most importantly, a bankruptcy does not mean the Diocese has no assets or that abuse survivors will get nothing.  To the contrary, the goal of a bankruptcy is to allow a bankruptcy judge to marshal the Diocese’s cash, other assets, and insurance, and then ensure that abuse survivors are compensated in a way that is fair to everyone.
 
However, in order to be compensated, abuse survivors must file a claim in the bankruptcy by a court-ordered deadline or they will forever forfeit their right to pursue a claim or compensation from the Diocese.  This deadline may well be shorter than the one-year “window” provided by the Child Victims Act, so it is critically important that abuse survivors contact a lawyer to learn their option and timely file a claim.
 
Frequently Asked Questions:
 
Why Did the Diocese Declare Bankruptcy? 
The Diocese of Rochester filed for bankruptcy in order to seek relief from the dozens of child sexual abuse lawsuits filed against it after the Child Victims Act took effect on August 14, 2019.
 
By filing for bankruptcy, all lawsuits against the Diocese are “stayed” (put on pause) and a bankruptcy judge is assigned to oversee all of the claims against the Diocese.  Generally speaking, the bankruptcy judge is responsible for determining the Diocese’s assets that are available to compensate abuse survivors, including cash, property, and insurance, and then deciding a fair way to use those assets to compensate abuse survivors.
 
Doesn’t the Bankruptcy Mean the Diocese Has No Assets? 
The bankruptcy absolutely does not mean that it has no assets or that abuse survivors will receive no compensation.  Instead, the purpose of a bankruptcy is to ensure that the Diocese’s assets are fairly divided among its creditors, including survivors of sexual abuse.  The first step in the bankruptcy is to determine what assets the Diocese has to compensate abuse survivors, including cash, property, and insurance proceeds.
 
Why Should I File a Claim?  
People with any type of claim against the Diocese need to know about the “bar date” deadline that requires all people with claims against the Diocese, including sexual abuse survivors, to file a claim with the bankruptcy court.  This deadline is called a “bar date” because people who come forward later are usually “barred” from ever filing a claim against the entities that declared bankruptcy.
 
The bankruptcy judge has not yet set a “bar date” for the Diocese’s bankruptcy, but these deadlines can be as short as 3-4 months from when an entity files for bankruptcy.  As you may know, the Child Victims Act gives abuse survivors one year from August 14, 2019, to file a claim for child sexual abuse, but the “bar date” may be shorter than that one year period.  If you were abused and have a claim against the Diocese, this means your deadline for filing a claim may be significantly shorter than the one year allowed under the Child Victims Act.
 
If you have a claim against the Diocese, or anyone associated with the Diocese, the time to act is now.
 
Does This Mean the Diocese Will Likely Shut Down?   
No.  There have been 20 Catholic bankruptcies across the United States, and one of the lead Catholic attorneys is now on record as admitting that the Catholic church has not had to shut down parishes or schools, or reduce their services, as a result of these bankruptcies.  For example, most Dioceses own a significant amount of property, and rather than sell their property, they take out a loan against their property to help compensate abuse survivors.  Moreover, insurance companies have contributed a significant amount toward the prior bankruptcies, such as an insurance company that paid more than $100 million toward the bankruptcy of the Jesuits.
 
Are Other Entities Involved, Like the Parishes?  
If you have a claim against the Diocese, you may also have a claim against other entities, such as a religious order or the parish or school where the abuse occurred.  This is another reason why it is important that abuse survivors act now and take steps to learn their options.
 
What Do I Need to Do to File a Claim in the Bankruptcy? 
In every bankruptcy, potential creditors including victims and survivors of childhood sexual abuse begin the process by filing a short “claim form” that advises the bankruptcy court of their claim.  To date, the bankruptcy court in every Catholic bankruptcy has protected the identity of abuse survivors from being publicly known.  The bankruptcy court will decide how abuse survivors should be compensated, but most Catholic bankruptcies have involved each abuse survivor submitting a 4-5 page statement, with a neutral third party then reviewing the statement of each person to decide how much they should receive out of the available assets.