The Catholic Diocese of Albany has decided to file for bankruptcy, saying a financial reorganization will help provide some compensation for the hundreds of sex abuse victims who have filed lawsuits.
“I understand this filing causes uncertainty, but as a Church and a community of faith, we must recognize that victim-survivors are our sons and daughters, and our brothers and sisters, and all of us, without exception, must work together to find ways to help them,” Bishop Edward B. Scharfenberger of Albany said in a March 15 statement.
“It’s a natural thing for us to do, especially for those who have been hurt by an institution we are all called to be a part of. We must reach out to all and journey with them through the healing process,” the bishop’s statement read.
Parishes and schools are not part of the filing and are incorporated as different entities, the bishop said.
“It is very important for me to point out that the mission and ministries of the diocese and parishes will continue during the reorganization proceedings,” he said. He asked for prayers “for all involved, that God’s peace and healing can prevail.”
Bishop Scharfenberger said the diocese has been named in more than 400 lawsuits filed from August 2019 to August 2021 under the Child Victims Act of 2019. The act allowed a retrospective one-year “look back” window during which alleged abuse victims could file lawsuits long after the statute of limitations had ended. Then-Gov. Andrew Cuomo extended the window through 2021, citing the obstacles caused by the coronavirus pandemic.
The diocese has settled more than 50 of these lawsuits. Settlements have been “large” and the “limited funds” have been depleted, the bishop said.
Chapter 11 bankruptcy will ensure “some compensation” for all abuse victims with pending litigation. The collection of debts and legal actions against the diocese will halt and a reorganization plan will determine available assets and insurance carrier participation “to negotiate reasonable settlements” with abuse victims and other creditors.
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