news release
OGDENSBURG, NY — The Diocese of Ogdensburg and the parishes, schools and other Catholic entities within the Diocese (the “Catholic Family”) today announced that they have reached an important milestone in the Diocese’s Reorganization case. The Catholic Family has reached a settlement in principle with the Official Committee of Unsecured Creditors (the “Committee”), who represents the interests of the survivors in the Chapter 11 case, under which the Catholic Family will contribute $45 million to a survivor Trust to be formed under a plan of Reorganization (the “Plan”) to be developed and proposed jointly by the Diocese and the Committee.
The Diocese filed its Chapter 11 case on July 17, 2023, before the United States Bankruptcy Court, Northern District of New York to resolve 125 claims of child sexual abuse filed against the Diocese under the Child’s Victim Act. The Committee was appointed by the U.S. Trustee to represent all survivors who filed claims against the Diocese and other members of the Catholic Family. This settlement in principle between the Diocese and the Committee is an important first step in forming a Chapter 11 plan that will lead to the Diocese emerging from Chapter 11.
Once the Plan is confirmed by the Bankruptcy Court, the $45 million contributed to the survivor Trust by the Catholic Family will be available for distribution to survivors of sexual abuse perpetrated against them by clergy, religious, lay employees and volunteers.
The Plan will be subject to a vote of all claimants in the chapter 11 case (including survivors of abuse) and must be confirmed by the Bankruptcy Court before its terms (including payment of the Catholic Family settlement) will become effective. However, the $45 million settlement in principle has been accepted by the Committee. The Creditors’ Committee is comprised of individuals who survived child sexual abuse by a church leader or representative. The Diocese anticipates that the Trust will also be funded by amounts paid by insurers who provided coverage that is applicable to the abuse claims asserted against the Catholic family. Any insurance recoveries paid to the trust will be in addition to the $45 million to be paid by the Catholic Family. Negotiations with the insurance carriers are ongoing.
Agreement on the monetary settlement marks a significant achievement in this case, but important issues remain. The Diocese and the committee will continue discussion of non-monetary issues, including the details of child protection policies and protocols that will enhance the measures already taken to protect young parishioners, students and all people entrusted to the care of the Church.
“The Diocese of Ogdensburg is committed to ensuring the safety of all persons entrusted to our care,” said Bishop Terry R. LaValley. “The great harm that has been caused by this sinful behavior must never be allowed to happen again. It is my sincere hope that this process has brought the survivors some comfort and peace.”
Once the Plan is approved, the Diocese and insurance carriers will pay into the settlement Trust for the survivors, and the Diocese will emerge out of bankruptcy.
Bishop LaValley stated, “My hope and prayer is that this process will bring peace and healing to all survivors and to all the faithful whose hearts were broken by the gravely sinful conduct of Church leaders. I pray that this settlement will bring healing to all.”