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Diocese of Buffalo files bankruptcy to resolve sexual abuse claims
By Caroline Salls
Pittsburgh, Feb. 28 – The Diocese of Buffalo filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Western District of New York to enable a financial resolution for individuals who have filed claims under the Child Victims Act, according to a news release.
The diocese said a yearlong window opened on Aug. 14 that suspends the statute of limitations related to allegations of past sexual abuse.
The release said the reorganization allows the diocese to continue uninterrupted its mission throughout Western New York while working to settle claims with existing diocesan assets and insurance coverages.
“We have no more urgent work than to bring about justice and healing for those harmed by the scourge of sexual abuse,” Bishop Edward B. Scharfenberger said in the release.
“Our decision to pursue Chapter 11 reorganization ... is based on our belief that this approach will enable the most number of victim-survivors of past sexual abuse in achieving fairness and a sense of restorative justice for the harm they have experienced.”
The diocese said its parishes are separately incorporated under New York State’s Religious Corporation Law and not included in the filing.
A timeframe for completing Chapter 11 reorganization has not been defined, the release said.
In connection with the bankruptcy filing, the diocese is seeking court approval to use the cash collateral of M&T Bank to pay employee wages and other operating expenses and to pay administrative expenses incurred in the Chapter 11 case.
According to court documents, the diocese has $10 million to $50 million in assets and $50 million to $100 million in debt.
The diocese’s largest unsecured creditor is M&T Bank of Buffalo, with a $1.6 million claim.
Bond, Schoeneck & King, PLLC is representing the diocese in its Chapter 11 proceedings.
The diocese’s Chapter 11 case number is 20-10322.
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