The Tablet Staff
WINDSOR TERRACE — The Diocese of Rockville Centre has filed for bankruptcy protection under Chapter 11, it was announced on Oct. 1.
According to officials, the bankruptcy filing was a necessary step that will allow the diocese to manage expenses stemming from lawsuits filed by survivors of clergy sex abuse. The bankruptcy will also help the diocese facilitate financial settlements with survivors under the Child Victims Act.
“We believe that this process offers the only way to ensure a fair and equitable outcome for everyone involved, including abuse survivors whose compensation settlements will be resolved by the courts,” Bishop John Barres of Rockville Centre said in a statement.
The Diocese of Rockville Centre serves 1.4 million Catholics in Nassau and Suffolk counties in Long Island. The parishes and Catholic schools in the diocese are separate legal entities and are not part of the bankruptcy filing.
In 2017, the diocese instituted the Independent Reconciliation and Compensation Program to provide sex abuse survivors an avenue for being heard and to be compensated. The IRCP continued up until the bankruptcy filing on Oct. 1. To date, IRCP has compensated approximately 350 survivors in amounts totaling more than $62 million.
Bishop Barres said the decision to file for Chapter 11 was not made lightly. The diocese was faced with difficulties brought on by the passage of the Child Victims Act in New York State, which extended the deadline under which sex abuse victims could file lawsuits. The bishop also said that the diocese’s insurers have failed to honor their contractual obligations, leaving the diocese financially vulnerable.
As a result, “it has become clear the diocese would not be able to continue its spiritual, charitable, and educational missions while shouldering the increasingly heavy burden of litigation expenses associated with these cases,” Bishop Barres said.
The diocese is determined to fulfill its obligations.
“We will work diligently with all survivors, creditors, and ministries to maintain open communication while we work toward our goal of completing a settlement and finalizing a restructuring plan that includes a comprehensive and final resolution for suffering survivors,” he said.
Despite the bankruptcy, officials in the diocese believe that current liquidity will be sufficient to fund operations and ministries during the period when the debts and obligations are being restructured under Chapter 11. According to officials, vendors will be paid for all goods and services delivered after the filing, and transactions that occur in the ordinary course of business will continue as before.
Employees will be paid their normal wages, and their benefit programs will continue uninterrupted.
Some of the parishes are named in Child Victims Act lawsuits along with the Diocese, officials said. The diocese intends to petition the Bankruptcy Court to stop separate civil actions against the parishes and bring all of the cases under the settlement process’s umbrella in the Chapter 11 case.
“We carefully and prayerfully considered other alternatives, but Chapter 11 was the only way to provide fair settlements to survivors while continuing to be of service to the 1.4 million Catholics in the geographical boundaries of the Diocese of Rockville Centre,” said Bishop Barres.
The diocese has also suffered financial strain due to the COVID-19 pandemic, according to officials. Approximately 40 percent of the diocese’s annual revenue comes from offertory collections at Mass. In August, the diocese reduced its staff by 10 percent, a move that is expected to save approximately $5 million.
The Diocese of Rockville Centre Chapter 11 case was filed in the U.S. Bankruptcy Court for the Southern District of New York.