Clergy abuse survivors' bid to have Rockville Centre Diocese's bankruptcy case dismissed denied

A federal judge has denied a motion by survivors of clergy sexual abuse to have bankruptcy proceedings against the Catholic Church on Long Island dismissed.

The motion, if approved, would have sent some 600 cases back to state court for trials and potential payouts. The Diocese of Rockville Centre praised the decision by U.S. Bankruptcy Court Judge Martin Glenn, while some attorneys for survivors said it will further drag out negotiations for a settlement nearly three years after the diocese declared bankruptcy.

But other attorneys said they believe Glenn is still giving the diocese a hard deadline of making a deal by Oct. 31, or taking the unprecedented step of kicking a Catholic diocese out of bankruptcy.

Glenn ruled on Tuesday that attorneys for the survivors failed to show that it is not possible for the diocese to come up with a deal in a “reasonable amount of time.” He, therefore, rejected their motion to dismiss the bankruptcy proceedings.

He also sided with the diocese in giving the parties until Oct. 31 to agree to a deal, instead of 30 days as the survivors proposed.

But Glenn also indicated he may not wait forever. “Time is beginning to weigh against the” diocese, he wrote, “because none of the dynamics in this case serve to explain why it is approaching three years with no proposal of a confirmable plan.”

Last week, during hearings on the bankruptcy, he said: “The survivors deserve an opportunity to be heard by a jury of their peers. They've been held off too long."

The diocese declared bankruptcy in October 2020, saying that potential payouts from the state Child Victims Act could leave it in financial ruin. The law allowed people to file lawsuits against the church, schools and other institutions regardless of how long ago the alleged abuse took place.

When the diocese declared bankruptcy, the cases stopped being heard in New York State Supreme Court. Instead, they went to the U.S. Bankruptcy Court.

Sean Dolan, a spokesman for the diocese, said in a prepared statement Thursday: “We are grateful that the court has denied the Creditors Committee's motion to dismiss the bankruptcy case. This decision recognizes that the only reasonable path forward is to reach a global settlement through mediation that fairly compensates survivors and allows the Diocese and parishes to continue their missions.”

“As it has throughout the Chapter 11 process, the Diocese will continue to seek and work towards that settlement,” he said. “The Diocese appreciates the timeframe set out for all parties by Judge Glenn and will continue to work toward a consensual settlement."

Jordan Merson, a Manhattan-based attorney representing some of the survivors, said the ruling was a disappointment that will likely delay the proceedings further.

“There’s not going to be a deal by Oct. 31,” he said. “There’s no mediation scheduled. There’s nothing happening. I feel really badly for the survivors who are caught up in this.”

But other attorneys for survivors saw it differently. While Glenn rejected their motion, they think he will still end the bankruptcy proceedings soon after Oct. 31 if there is no deal.

“The judge is giving the parties one last try,” said Los Angeles-based attorney Paul Mones. “This is anything but a victory for them [the diocese] because they are staring down an unprecedented situation” of being thrown out of bankruptcy proceedings.

Another attorney, Minnesota-based Jeff Anderson, said Glenn didn’t permanently deny the motion to dismiss the bankruptcy, “he deferred it.”

Glenn is prepared to “take dramatic steps” against the diocese, Anderson said. “... Time is up and the clock is running.”