A day the church has long feared

The church spent millions of dollars lobbying statehouses for decades, arguing it would be swamped with lawsuits if time limits on suing were lifted. That battle now lost, it is girding for Round 2, by turning to compensation funds and bankruptcy.

Compensation funds offer payment to victims if they agree not take their claims to court. They offer a faster, easier way to some justice, and cash, but the settlements are typically a fraction of what victims can get in trials. And critics say the church is just using them to avoid both a bigger financial hit and transparency.

New York Archbishop Timothy Dolan set up the first fund in 2016, pitching it as a way to compensate victims without walloping the church and forcing it to cut programs. It has since paid more than $67 million to 338 alleged victims, an average $200,000 each.

The idea has caught on in other states. All five dioceses in New Jersey and three in Colorado opened one, as did seven dioceses in Pennsylvania and six in California, including the Archdiocese of Los Angeles, the largest in the U.S.

Such funds, Dolan said in a newspaper op-ed piece last year, “prevent the real possibility — as has happened elsewhere — of bankrupting both public and private organizations, including churches, that provide essential services in education, charity and health care.”

Bill Donohue, president of the Catholic League and a longtime critic of the new statute of limitations laws, said their effect — if not their intent — “is to disable the church.”

“When a diocese goes bankrupt, everyone gets hurt,” he said.

But bankruptcy has become an increasingly more common option. Less than a month after New York’s one-year lookback window took effect, the upstate Diocese of Rochester filed for bankruptcy, the 20th diocese or religious order in the country to do so, listing claims from alleged abuse survivors and other creditors as much as $500 million. Assets to pay that are estimated at no more than one-fifth that amount.

The Diocese of Buffalo may be next. It has begun paying victims of the 100 priests it considers “credibly accused” of abuse, tapping proceeds from the sale of a lavish $1.5 million mansion that once housed its bishop, Richard Malone, who resigned Wednesday after learning the results of a Vatican-mandated investigation into how his diocese handled abuse claims.

When a diocese files for bankruptcy, lawsuits by alleged abuse survivors are suspended and payments to them and others owed money — contractors, suppliers, banks, bondholders — are frozen while a federal judge decides how much to pay everyone and still leave enough for the diocese to continue to operate. It’s orderly and victims avoid costly and lengthy court cases, but they often get less than they would if they were successful in a trial.