The Diocese of Buffalo, New York, is asking each of its parishes to vote to enter bankruptcy for two days in an attempt to exit the diocese’s Chapter 11 status, which has been ongoing for six years.
Local CBS affiliate WIVB reported that the diocese’s latest plan to shake off bankruptcy involves a process called “rapid-prepackaged bankruptcy” in which negotiations between parties occur before the actual bankruptcy filing takes place, leading to shorter time spent in bankruptcy. According to WIVB, the strategy aims to “protect individual parishes from child sex abuse liability claims that happened prior to the bankruptcy filings.”
The diocese said in a statement that the parish bankruptcy filings would not be undertaken until the “very last minute” before the confirmation hearing later this year to approve the reworked Chapter 11 plan. The diocese anticipates that the parishes would emerge from bankruptcy within 48 hours.
The Diocese of Rockville Centre and the Archdiocese of New Orleans successfully used rapid-prepackage bankruptcy in their own Chapter 11 cases, the diocese added in its statement.
“We will provide further updates as this process advances and are heartened at the possibility of at last providing victim-survivors the possibility of closure and healing,” the diocese continued. “With the prospect of finally achieving this goal, we look to the future with renewed commitment and focus on our mission and work in service to the Catholic faithful throughout Western New York and our broader community.”
WIVB reported that the plan is supported by the diocese and its pastors, but it cannot move forward without the approval of every parish board of trustees.
Monsignor Robert Zapfel, who is on the Diocesan Finance Council, said that the word “bankruptcy” should not act as a deterrent.
“To hear the word bankruptcy is always distressing. Think of a corporation that is in bankruptcy — they’re either going to go out of existence or they’re going to restructure severely,” he said, according to WIVB. “The Diocese of Buffalo and the parishes are in the second case. We’re looking to restructure and to move forward. We’re not going out of existence.”
However, according to local ABC affiliate WKBW, parishioners have raised concerns that entering bankruptcy would negatively affect their parishes’ credit ratings or carry other financial consequences.