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Diocese of Buffalo and committee get go-ahead to begin mediation
By Sarah Lizee
Olympia, Wash., Feb. 4 – The Diocese of Buffalo and its official committee of unsecured creditors are cleared to begin mediation in order to resolve issues relating to the Chapter 11 bankruptcy case, according to documents filed Thursday with the U.S. Bankruptcy Court for the Western District of New York.
The court had previously granted conditional approval of the mediation but deferred it until the court could consider applications for pre-mediation discovery and issue a further order identifying the parties who will be required to participate in the mediation process.
As previously reported, the diocese had asked that a mediator facilitate both the development of a reorganization plan and the resolution of two adversary proceedings.
The committee had said the mediation process would likely address, among other things, disputes regarding insurance coverage, property available to the diocese’s estate and other Catholic entities to fund a settlement, and the diocese’s related entities liability for sexual abuse claims.
“The complexities of this case far exceed the debtor’s initial expectations,” the court said in its conditional order, adding that the diocese is “in no position” to present a plan unless it first resolves “many difficult legal and factual issues.”
“The time has come for all parties in good faith to negotiate a fair and reasonable settlement of the various disputes in this case,” the court said.
“If a settlement was easy to accomplish, the parties would already have achieved that result. Tremendous complexity suggests a need for mediation.”
The diocese filed Chapter 11 bankruptcy on Feb. 28, 2020 under case number 20-10322.
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