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NY Catholic Dioceses Bankruptcies Place Abuse Claims in Limbo

New York-based Roman Catholic dioceses that filed for Chapter 11 protection to address child sex abuse lawsuits are fueling tensions by asking Bankruptcy Courts for a victims’ claim filing window that’s shorter than what survivors were given under a recently enacted state law.

New York’s Child Victims Act, signed into law by Gov. Andrew Cuomo (D) in 2019, has spurred a flood of abuse lawsuits against the church and other organizations. Victims have filed more than 4,800 lawsuits against alleged abusers and institutions that harbored or concealed them, state court records show. Four of New York’s eight local dioceses — Syracuse, Rochester, Buffalo, and Long Island’s Rockville Centre — have filed Chapter 11, allowing them to ease the burden of litigation by consolidating victims’ lawsuits against them and negotiating with claimants as a single class.  Dealing with shortened deadlines could cause stress for victims and suppress their legal rights in emotionally charged, controversial cases, victims’ proponents say.

The New York law allows child sex abuse victims to sue at any time before they turn 55 and creates a temporary window — until Aug. 14, 2021 — to file claims that previously were blocked by the statute of limitations. The Bankruptcy Code, on the other hand, allows debtors to give as little as 21 days’ notice of an upcoming deadline to submit claims in a bankruptcy proceeding. None of the dioceses in chapter 11 have argued for that bare minimum. But they all say the bankruptcy court shouldn’t align the notice period with the CVA’s expansive time frame.

Bankruptcy judges have recognized the unique nature of sex abuse-related cases. “This case is not like a typical commercial filing, in which the debtor can readily identify from its books and ledgers all of the actual and disputed trade creditors,” Judge Carl L. Bucki of the U.S. Bankruptcy Court for the Western District of New York observed in a September opinion in the Buffalo diocese’s case. By reopening the statute of limitations, New York “expressed a policy decision that deserves the respect of this court,” he said.

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