A bankruptcy settlement between the Diocese of Buffalo, New York, and its creditors — primarily clergy sex abuse survivors — is facing complications after a judge ruled that the creditors must opt in to a settlement that waives their right to sue the diocese’s related entities, such as parishes, in the future.
Zeale News reported in January that the diocese was close to resolving a years-long process of settling hundreds of claims of clergy sex abuse; however, the bankruptcy judge, Carl Bucki, ruled Feb. 27 that claimants must affirmatively opt in to the plan before being bound by its third-party liability releases.
Other dioceses, such as the Dioceses of Rochester and Syracuse, have used opt-out methods for claimants to approve settlements. Under an opt-out plan, survivors who do not object to the settlement are counted as consenting to it and its terms, including liability releases. Under an opt-in plan, however, survivors must give clear affirmation that they want to join the settlement. Claimants who do not respond are not treated as approving the deal, making it harder to reach a resolution.
Local outlet WBEN reported March 20 that attorney Steve Boyd, who represents some of the survivors, said there are around 900 claimants in the case. The number of creditors is presenting a “huge challenge” to the settlement, he said, since some survivors are suffering from mental illness or have passed away. He said others don’t have legal representation, and the only way to let them know that they must opt in to the settlement to get it approved is to send them a ballot and hope they return it.
According to Boyd, he and most of the attorneys representing the diocese and survivors are going to work hard to get the opt-in plan approved in order to finally put the case to rest.
National Today reported that the diocese and a creditors’ committee filed a motion in the bankruptcy court March 13 to reconsider the opt-in order, saying that the approval process is impractical and is threatening previously held hope of resolving the case and ending the diocese’s bankruptcy status.