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Diocese of Ogdensburg, N.Y., files for bankruptcy

While the bankruptcy filing was a difficult decision, Bishop LaValley said it was a necessary one
St. Mary's Cathedral Ogdensburg, New York. (Photo: Wikipedia)

St. Mary's Cathedral Ogdensburg, New York. (Photo: Wikipedia)

Published: July 19, 2023 05:28 AM GMT
Updated: July 19, 2023 05:29 AM GMT

The Diocese of Ogdensburg, New York, filed for Chapter 11 bankruptcy July 17, making it the sixth of the state's eight dioceses to do so in response to a wave of sexual abuse lawsuits.

The "difficult and painful" decision -- taken after "extensive prayer and consultation" -- was necessary to satisfy a new wave of lawsuits permitted by New York's Child Victims Act, explained Bishop Terry R. LaValley in a video message posted to the diocesan website.

Passed by the New York Legislature and signed into law in 2019, the CVA extended the state's statute of limitations for sexual offenses against children by granting a one-year look back for time-barred civil claims to be revived; giving survivors until age 28 to press charges for felonies and age 25 for misdemeanors; and allowing survivors up to age 55 to bring lawsuits. The Legislature extended the look-back window to last two years, concluding in August 2021, due to the COVID-19 pandemic.

As a result of the legislation, "138 lawsuits previously barred by the statute of limitations were filed against the diocese, some parishes and other related entities," said Bishop LaValley in his message.

The cases related to incidents that "allegedly happened decades ago, prior to the establishment of our current safe environment policies," he said.

Over the past three years, the diocese had resolved 14 claims "by settlement or dismissal," he said.

On its website, the diocese said that litigation costs and settlements for the remaining 124 cases "would likely exceed many millions of dollars," and that the diocese "simply does not have the resources to settle or litigate these claims."

While victim advocates such as SNAP (Survivors Network of those Abused by Priests) have often criticized such filings, the diocese said on its website that "reorganization is fairer to all."

The bankruptcy filing will "eliminate a race to the courthouse" that would otherwise "exhaust all resources available to pay claims, leaving nothing whose cases are resolved later," said Bishop LaValley in his video message.

Under New York state law, diocesan parishes and related entities are separate corporations, and only the diocese itself has filed for bankruptcy, he said.

However, "it is likely that parishes will be asked to contribute funds to settle these claims, so they can be free of litigation in state court and released from all liability for existing claims," Bishop LaValley said.

Along with parishes, "some schools also have been sued under the CVA," said the diocese on its website, adding that it hoped to resolve such claims, along with those against parishes, through the reorganization, with "minimal impact" on the schools' operation.

As a separate entity, Catholic Charities will not be directly affected by the filing, and charitable donations to it and other diocesan initiatives -- such as the Bishop's Fund, planned giving and capital campaigns -- will not be used for the settlements, said the diocese.

In addition, "we remain committed to ensuring we can continue to provide the sacraments and essential ministries," the diocese said.

Currently, the diocese does not plan to lay off employees, but cautioned it remained uncertain if staff reductions would eventually become necessary during reorganization. Salaries, benefits and pension plans for retirees (the last of which are generally not part of available assets under Chapter 11 filings) will remain intact.

"I again apologize for the suffering caused by child sexual abuse by priests and other church personnel. I am sorry for the suffering endured by survivors and their families," said Bishop LaValley in a July 17 letter to diocesan faithful. "I remain committed to helping victims find hope, healing and some peace of mind. I remain equally committed to maintaining a safe environment in our church for all, especially our children and young people."

"As I stated above, a goal of the reorganization is to help us continue our mission," he added. "We will continue to serve God's people and spread the Gospel in the North Country."

In its recently released 2022 audit on child and youth protection among the 196 U.S. Catholic dioceses, the U.S. Conference of Catholic Bishops notes that abuse claims dropped between 2021 and 2022.

As part of the report, the Center for Applied Research in the Apostolate, based at Georgetown University, found that total costs incurred by dioceses and eparchies due to allegations were down 19% from the previous year, totaling over $157 million.

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