The Catholic Diocese of Rockville Centre has come to an agreement with 600 abuse survivors and agreed to pay a little more than $323 million. The Diocese had declared bankruptcy in October 2020 after the state of New York opened the statute of limitations allowing for older claims against the Diocese to be brought in civil court.
The agreement is a landmark one particularly in light of the last year’s offer of $200 million was summarily rejected by survivors. In this settlement, the Diocese will contribute $234.8 million and insurance companies will kick in another $85.3 million. The settlement will also receive funding from another insurer that is being liquidated in a separate insolvency proceeding and from attorneys representing abuse survivors.
While it has not been announced how the settlement will be divided among survivors, it is typically decided by a committee of people appointed by the bankrutpcy court who have no interest in the proceedings to evaluate individual claims and apportion the monies based on criteria they determine.
The Rockville Centre settlement is the largest bankruptcy settlement in the United States and many experts believe the settlement was affected by the recent Supreme Court decision in the Purdue Pharma bankruptcy. Dioceses had previously relied on bankruptcy courts’ ability to grant sweeping legal protections to non-bankrupt entities that contributed to settlement funds, a practice that the US supreme court shot down this year.
That ruling, in the bankruptcy of OxyContin maker Purdue Pharma, forced the bankrupt dioceses to come up with new ways to incentivize settlement contributions from insurers and parishes, which in previous Catholic bankruptcies had contributed funds to dioceses’ settlement plans to end their exposure to sex abuse lawsuits.
In New York State, six of the eight Catholic dioceses have declared bankruptcy including Albany, Buffalo, Rochester, Ogdensburg, Syracuse, and Rockville Centre.
