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Buffalo Catholic Diocese files for bankruptcy
The Buffalo Catholic Diocese has announced the formal filing for Chapter 11 reorganization in federal court, under the U.S. Federal Bankruptcy Code.
The move had been expected for some time. Interim Bishop Edward Scharfenberger will hold a press conference to address the situation at 1 p.m. Friday.
According to the petition, the diocese has somewhere between $10 million to $50 million in assets, between $50 million to $100 million in liabilities, and anywhere from 200 to 1,000 creditors.
The diocese owes $3.5 million to its 20 largest unsecured creditors. The largest creditor is M&T Bank, which is owed $1.6 million. The other 19 are all abuse survivors owed $100,000 each via Child Victims Act lawsuits.
Since the opening of the Child Victims Act window in August, approximately 250 lawsuits have been filed against the diocese by alleged abuse victims. The diocese says it expects ultimately more than 400 alleged victims to file suits. Insurance may cover some of the CVA claims, according to Mendolera.
“Abuse survivors need to understand the Diocese has assets and insurance, said attorney Michael Pfau, whose firm has represented thousands of abuse survivors across the country."A bankruptcy is simply a way to give the Diocese a legal ‘time out’ from the current litigation so that one judge can ultimately decide a fair way to compensate all people who timely file a claim in the bankruptcy. Bankruptcy allows the Diocese to restructure its assets and finances to continue operating while also providing some measure of accountability for child sexual abuse claims."
Pfau said now is the time for Buffalo survivors to file a claim with the bankruptcy court "in order to ensure their rights are protected.”Find more information online here.
Filed Under Bankruptcy Catholic Church Child Victims Act (CVA) News Radio