The Middletown Press (Middletown, CT)
Experts: Diocese bankruptcy can stop restitution in abuse cases
NORWICH — The door may be closing for sexual abuse survivors to seek restitution after the Norwich diocese announced last week it was declaring bankruptcy, experts say.
Bishop Michael Cote, of the Roman Catholic Diocese
of Norwich, said a bankruptcy petition was filed because the diocese is facing nearly 60 lawsuits in connection with abuse accusations that occurred at the Mount Saint John School in Deep River.
The Mount Saint John School, which closed in
2013, was a boarding school where juvenile courts and the state Department of Children and Families referred children. The property is now vacant and for sale.
“By filing for bankruptcy relief, the diocese is seeking to ensure a fair and equitable outcome for everyone involved,” he wrote in the statement. “That is because the bankruptcy court will centralize all litigation and oversee a settlement that ensures that all survivors are included and treated fairly. Individual private litigation could deplete the diocese’s funds with the first case, leaving other survivors without any possibility of compensation.”
In the filing, the diocese said it had between 50 and 99 creditors, between $10 million and $50 million in assets and between $50 million and $100 million in liabilities.
But a lawyer for some of the plaintiffs and a leader of an advocacy group for victims of abuse by clergy said once the bankruptcy is official it will prevent other victims who have not made claims from receiving restitution.
Kelly Reardon, a lawyer based in New London, said she represents six victims, four of whom have filed lawsuits against the diocese.
“Those cases will become claimants, they’ll become creditors, in the bankruptcy,” she said. “They would be able to make claims and then it would be determined what amount of compensation they would receive.”
Reardon said she did not know the exact number of lawsuits filed, but there were 65 claimants as of last week. She said her clients attended Mount Saint John School during the 1990s when sexual abuse by clergy at Catholic institutions was a “significant and widespread problem.”
Reardon and Gail Howard, the co-leader of the Connecticut Chapter of the Survivors Network of those Abused by Priests, said the bankruptcy filing would eliminate an avenue for many victims.
“It’s important for any survivor of childhood sexual abuse to come forward and ask for help in healing,” Howard said. “Setting the issue of financial compensation and all that aside, whatever happens in that arena, it is still possible to get help and support so that you can heal.”
Lawsuits after abuse allegations
Allegations of abuse at the hands of clergy and staff of the Norwich diocese first came to light in 2018, when 24 former Mount Saint John School male students said they were sexually assaulted during the 1980s and 1990s when they were teens, court documents show.
“The vast majority of the claimants experienced abuse at the hands of Brother Paul McGlade, who was running the school,” Reardon said of the now approximately 60 lawsuits. “However, there are other (claimants), including some of mine, who experienced abuse by teachers, by other clerical figures who were working at the school and so it all involves sexual abuse.”
In 2019, diocese officials released a statement that included a list of priests who they said had credible allegations of sexual abuse against them. However, McGlade, who died in 2013, was not on the list. The officials also noted the diocese spent nearly $8 million to settle nine claims as of Jan. 31, 2019.
Norwich is not the only Connecticut Catholic diocese facing lawsuits stemming from abuse accusations. In a report provided by the Archdiocese of Hartford, it said it paid $50.6 million for 142 allegations of clergy sexual abuse of a minor involving 29 archdiocesan clergy and three priests from other dioceses.
How bankruptcy could impact victims
Reardon said Norwich is the 31st diocese in the country to declare bankruptcy after facing lawsuits alleging abuse by clergy. According to the United States Conference of Catholic Bishops, there are 194 archdioceses and dioceses in the United States.
“Abuse is everywhere,” said Howard, whose organization is a support and advocacy group for people who have survived abuse by clergy from any religious sect. “It has nothing to do with celibacy rules or anything like that. It has to do with trust and access and corruption.”
Howard said last week she was reviewing a bankruptcy filing for the diocese of Buffalo in New York. After filing for bankruptcy in February 2020, she said court records show the diocese has spent $3.8 million on lawyers and other bankruptcy-related costs.
“My take on that is, they were going to spend more on lawyers than they would have spent on settlements, if people were able to bring suits against them,” she said.
Richard Croce, a Middletown bankruptcy attorney, said bankruptcy allows claimants to get an even distribution of available funds.
“Basically, if there are 10 people that want to sue you, and two of them lawyer up and sue you, and get judgments and try to collect it, they are able to collect it out of your assets,” he said. “The eight that had claims that didn’t file their claims yet, may end up being out of luck. A bankruptcy filing brings all the creditors into one forum, so that they can all share in whatever distribution is made.”
Croce said it is “generally” true that no one can file after a bankruptcy is made official, but the diocese will have a duty to notify as many people as possible and there will be a brief window to file a claim.
“If I’m advising a creditor, I’m going to tell them to make their claim timely,” he said. “Don’t blow the deadline because you may get boxed out. The law says you’re boxed out, but if there’s some ... legitimate reason why you did not file a claim on time, and the money hasn’t been paid out, then maybe the judge will let you file that claim. It’s not a risk I would take as a creditor.”