Buffalo Diocese files for bankruptcy

Bishop Edward B. Scharfenberger of Albany, appointed apostolic administrator of the Buffalo diocese, speaks during a press conference in Buffalo in December.

BUFFALO, N.Y. — The Catholic Diocese of Buffalo filed for bankruptcy Friday morning as it faces hundreds of lawsuits alleging decades of child sexual abuse and cover-ups.

The diocese said in a statement its primary aim is “enabling financial resolution for the most number of individuals who have filed claims under the Child Victims Act.”

In August, the law opened a one-year window temporarily eliminating the statute of limitations for civil cases involving sex crimes. Since then, more than 1,600 cases have been filed statewide, many of them resurfacing decades-old allegations.

The statement claims “a further objective of reorganization is that it allows the diocese to continue uninterrupted its mission throughout Western New York,” while working to settle claims with existing diocesan assets and insurance coverages.

“We have no more urgent work than to bring about justice and healing for those harmed by the scourge of sexual abuse,” the statement read.

WKBW TV reported that, according to bankruptcy documents filed in federal court, the Buffalo diocese is facing between $50 million and $100 million in estimated liability. It has been speculated that the church could sell off certain properties to raise funds to help pay off its liabilities.

The Buffalo diocese is the second in New York to file for Chapter 11 bankruptcy, which allows for reorganization of assets instead of liquidation. The Diocese of Rochester filed for bankruptcy in September.

Friday’s announcement was largely anticipated as the Buffalo diocese, facing more than 250 lawsuits over the past six months alleging sexual abuse, has emerged as the most-named defendant in all Child Victims Act cases.

Associated Press reported the diocese already has paid out about $18 million — including $1.5 million from the sale of the bishop’s mansion — to more than 100 victims under an independent compensation program established in 2018.

The number of lawsuits is expected to grow to more than 400, financial director Charles Mendolera said in a court filing. The diocese reported a $5 million loss in 2019, AP reported.

Attorneys representing victims of sexual abuse in the diocese were critical of the bankruptcy move, saying the diocese is merely trying to duck financial responsibility.

But Albany Bishop Edward B. Scharfenberger, who is also Apostolic Administrator of the Diocese of Buffalo, said, “The intense emotional, mental and spiritual pain inflicted on these innocent victim-survivors is a heavy burden they are forced to carry throughout their lives.

“Our decision to pursue Chapter 11 reorganization — arrived at after much prayer, discernment and consultation with the College of Consultors and our Diocesan Finance Council — is based on our belief that this approach will enable the most number of victim-survivors of past sexual abuse in achieving fairness and a sense of restorative justice for the harm they have experienced.”

The diocese notes that individual parishes are separately incorporated under New York State’s Religious Corporation Law and not included in Friday’s filing. Similarly, Catholic elementary and secondary schools are also not part of the Chapter 11 case, given that they are owned by parishes or are separately incorporated entities.

Catholic Charities of Buffalo, with its extensive ministries that serve residents throughout Western New York, is also separately incorporated, as well as the diocese’s capital and endowment campaign, Upon This Rock.

The bankruptcy filling for the diocese comes in the wake of the Dec. 4 resignation of Bishop Richard Malone following a Vatican-mandated investigation. Malone had faced calls from members of his staff, clergy and the public to step down amid criticism that he withheld the names of dozens of credibly accused priests and mishandled reports of misconduct against others.

Movement to Restore Trust, a Catholic group in Western New York, said Friday that a bankruptcy filing by the diocese was inevitable.

“Resolving the claims of victims of sex abuse under the supervision of a federal bankruptcy judge is the only way to insure the prompt, fair and equitable treatment of claimants,” said John J. Hurley, Movement to Restore Trust organizing committee member.

“The bankruptcy court will provide a forum in which the legitimate interest of victims in openness and transparency can at last be assured,” he said. “We think that it will provide the essential starting point for the reconciliation, healing, and ultimately, reform of the Catholic Church in Buffalo that so many desire.”