Diocese of Buffalo Seeks to Transfer 35 Abuse Claims to Boy Scouts Bankruptcy Plan – InsuranceNewsNet


October 12—Thirty-five prosecutions under the Child Victims Act against Catholic Diocese of Buffalo may end up being settled in federal bankruptcy court – albeit through the Boy Scouts of America The chapter 11 plan, not the diocese’s own bankruptcy process.

Lawyers for the diocese asked the Chief Justice Carl L. Bucki of United States Bankruptcy Court, Western District of New York to let the diocese “buy in” to the scout establishment plan which was approved in September.

If approved, the move would allow the diocese to transfer 35 complaints of childhood sexual abuse – a small fraction of the more than 900 complaints filed against it – to a $2.46 billion settlement trust in the Boy Scout bankruptcy case. The diocese would transfer to the trust its rights to insurance coverage under Scouts of America Strategies. The diocese would also be granted “limited protected party” status, whereby any Scouting-related abuse litigation would be suspended for at least 12 months, while the diocese negotiates an “appropriate contribution” with the settlement trust.

Channeling the 35 claims to the trust “would result in the availability of additional funds to distribute to other abuse claimants in the diocese’s bankruptcy case,” Richard C. Suchandirector of operations for the diocese, said in court documents filed last week.

Participating in the Boy Scout plan “represents a fair and equitable compromise of issues” and was “in the best interest of the Diocese’s estate and all of its creditors,” including the 35 plaintiffs alleging Scouting-related abuse, Suchan said.

The Diocese’s motion highlights the layers of complexity in the two bankruptcy cases.

The Scouts of America faces a deluge of child sexual abuse lawsuits, including around 200 in Western New York courts. She filed for bankruptcy protection on February 18, 2020. More than 80,000 people have filed sexual abuse complaints in the Scouts’ bankruptcy case. A federal judge from Delaware approved its reorganization plan in September, although representatives from the official committee of child sexual abuse plaintiffs in the Boy Scouts bankruptcy said the plan may not take effect for six to 18 months.

Victims will be entitled to minimum compensation of $3,500 and up to a maximum of $2.7 milliondepending on the severity and frequency of the abuse and other mitigating factors, including whether the abuse occurred in a state with statutes of limitations that permitted prosecution of sexual abuse cases ago many years, according to Federal Court documents.

But it’s still unclear when the claim payments will be made.

The Diocese of Buffalo filed for Chapter 11 protection 10 days after the Scouts of America in 2020, as the number of lawsuits under the Child Victims Act alleging sexual abuse by priests and other employees soared into the hundreds. The diocese is currently in mediation negotiations with insurers, its parishes and schools and the committee that represents unsecured creditors, namely sexual abuse claimants.

Like many religious groups, the Diocese, together with its parishes and schools, acted for many years as a “chartered organization”, sponsoring, hosting and otherwise supporting the Scouting activities offered by the Scouts of America and three local councils of Western New York.

As such, he has been named as a defendant in Scouting-related cases.

The diocese identified 94 lawsuits that identified the diocese or a parish in a case related to the Scouts of Americaaccording to court documents.

Of these, 35 allege abuse that occurred after January 1, 1976, and may be transferred to the trust, as part of the reorganization plan. The other 59 abuse claims allege pre-1976 abuse and are not covered by insurance policies issued by the insurance companies that signed on to the settlement.

The diocese plans to address those 59 claims in its own bankruptcy case, according to court documents.

The Diocese of Buffalo joins 10 other dioceses and archdioceses and the Catholic Fraternal Benefit Society of America under the name of “Roman Catholic Ad Hoc Committee” which reached a settlement agreement last March with the Scouts of America and other parties in the scouts bankruptcy, including the official committee that represents sexual abuse claimants.

Bucki to hear arguments on Diocese motion November 8.


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