WINDSOR TERRACE — The Diocese of Buffalo, N.Y., faces near certain bankruptcy after it posted a $5 million loss in 2019, in large part because of the financial impact of the sexual abuse crisis that has plagued the diocese for almost two years.
The diocese’s assets fell by $21.7 million, according to the diocese’s annual financial report released Jan. 30.
“In response to the magnitude of the number of claims, and alleged damages, the CAO (Central Administrative Offices of the Diocese of Buffalo) has determined that a filing of a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code is imminent,” the report stated.
The diocese would be the second of New York’s eight dioceses to seek bankruptcy protection. The Rochester Diocese filed for Chapter 11 protection in September. Nationwide, more than 20 dioceses have sought bankruptcy protection in a reckoning of the abuse crisis in the church that has spanned almost two decades.
In the Diocese of Buffalo, former Bishop Richard Malone was accused of mishandling the abuse crisis in the diocese. He resigned in December after Bishop Nicholas DiMarzio conducted fact-finding mission in the diocese in October.
“The diocese published its financial overview, which it does annually, and it includes comments from the auditor. There is nothing new here,” Gregory Tucker, a spokesman for the Diocese of Buffalo, told Currents News. “Bishop Scharfenberger, the apostolic administrator of the diocese, has already indicated that the diocese is considering a Chapter 11 reorganization and, in all likelihood, will go down that route.
“We will communicate thoroughly about this at the appropriate time. The primary reasons for doing so would include the fair and just restitution for victim survivors, versus a litigation approach that would favor those first in line (with initial costly settlements depleting the diocese’s resources). It would also enable the diocese to continue uninterrupted the vital work of ministry and outreach that is carried out across Western New York each and every day.”
A decision about a Chapter 11 filing “is likely a few weeks away,” Tucker said.
Bishop Scharfenberger, a former priest of the Diocese of Brooklyn, is the bishop of the Albany Diocese and is serving as a temporary administrator for the Diocese of Buffalo.
“It’s possible that pursuing a Chapter 11 reorganization process will be in the best interest of all, beginning with those who have been harmed and are intent on pursuing restorative justice,” Bishop Scharfenberger told Western New York Catholic, the Diocese of Buffalo’s newspaper.
“We’re considering all options, and we will only choose that option if we conclude that this is a course that serves our essential needs to bring about healing and reconciliation and continue the vital work of evangelization, outreach and ministry that accomplishes so much good each and every day,” he said.