Rockville Centre Diocese Faces Hundreds of Sex Abuse Cases in Bankruptcy Proceeding

Sex Abuse Cases in Rockville Centre Diocese

On May 24, 2022, New York Governor Kathy Hochul signed New York’s Adult Survivors Act (ASA), which gave survivors of adult sexual abuse (over age 18 when the offense occurred) a year to file their claims, regardless of when the offense occurred. An action dismissed previously as time-barred can be revived.  The measure, which takes effect six months after signing, gives victims until November 23, 2023, to file claims. The window is important because in 2019, New York extended the statute of limitations for adults filing civil lawsuits for certain sex crimes to twenty years – but the measure was not retroactive.

Sponsored by State Senator Brad Hoylman and Assemblymember Linda Rosenthal, the Adult Survivors Act was modeled on New York’s Child Victims Act (CVA). Enacted in August 2019, the CVA allowed survivors of childhood sexual abuse a year to file time-barred claims (originally scheduled to close in August 2020, the filing was extended to August 13, 2021, due to the pandemic). According to Child USA, 10,857 cases were filed under the CVA during that period.

The Adult Survivors Act allows survivors to assert claims against institutions or employers, where the sexual abuse occurred at work or was somehow associated with employment. Under New York Human Rights Law, employers are broadly liable for the conduct of their employees, including sexual harassment and abuse.

The Roman Catholic Diocese of Rockville Centre, which represents New York’s Nassau and Suffolk counties, is the eighth largest Roman Catholic diocese in the U.S. On October 1, 2020, the Rockville Centre Diocese filed a petition seeking relief under chapter 11 in the United States Bankruptcy Court for the Southern District of New York, making it the largest Diocese to seek Chapter 11 protection to deal with sexual abuse claims. Under the CVA, the Rockville Centre Diocese faced 223 suits by alleged victims of child sex abuse at the time.

The bankruptcy strategy has been used broadly in response to sex abuse claims. The Boy Scouts of America filed for bankruptcy in 2020. In New York, four of the eight Dioceses (Rockville Centre joins Rochester, Syracuse, and Buffalo) have filed. The Diocese of Albany faces 400 suits and has discussed both mediation and a chapter 11 filing.

In chapter 11 bankruptcies, plaintiffs become creditors, eligible for a portion of a settlement fund. In most diocese bankruptcies before 2018, fewer than 200 claims were brought. Settlement funds were generally less than $100 million, funded primarily by insurance.

After the Rockville Center bankruptcy filing, the 223 pending cases fell under the supervision of the bankruptcy court. The Dioceses have claimed that bankruptcy blocks new claims – but many more victims have come forward. In Buffalo, nearly 1,000 claims have been filed since the Diocese entered bankruptcy in 2020. Rockville Centre currently faces at least 700 claims filed in bankruptcy court.

Though mediation continues, the negotiations in the Rockville Center case have moved slowly. Insurers have fought against compensation demands. After nearly two years, the Diocese has neither reached an agreement with its insurers nor filed a compensation plan.

On August 4, 2022, New York bankruptcy Judge Martin Glenn said he would set a new bar date for adult abuse claimants. Both the diocese and the future claims representative (Retired U.S. Bankruptcy Judge Robert E. Gerber) argued in favor of a new bar date, while the unsecured creditors’ committee argued against it. Judge Glenn explained that the rationale behind the New York law justified opening a window for time-barred Chapter 11 claims. He also noted that claimants would receive relief more quickly with a Chapter 11 claim than with a state court claim.

Judge Glenn has indicated that he will base the claim deadline on additional information from the diocese about the time to publish the notice.