Clergy abuse survivors propose $450M payout from Rockville Centre diocese

With the Long Island Catholic Church bankruptcy case at “loggerheads,” lawyers for clergy sexual abuse survivors Thursday proposed a settlement in which the diocese would pay at least $450 million to victims.

Hundreds of millions more would be paid out to survivors by church insurance companies, the attorneys said. They also cited filing documents listing the amount spent on legal fees by both sides at $56 million since the Diocese of Rockville Centre declared bankruptcy in October 2020.

In addition, attorneys filed court papers Thursday alleging that the diocese attempted to keep millions of dollars out of reach of survivors before they could sue under the 2019 Child Victims Act.

Some 620 childhood survivors of clergy sex abuse are waiting for the settlement by one of the largest Roman Catholic dioceses in the nation. Some of the abuse dates back decades.

'I want action'

At Thursday's hearing in Manhattan at the U.S. Bankruptcy Court for the Southern District of New York, Chief Judge Martin Glenn voiced his frustration over delays in resolving the bankruptcy case.

“The mediation has come to loggerheads,” Glenn said in court. “I want action.”

James Stang, the main lawyer representing the survivors, known as the Unsecured Creditors Committee, said they filed the plan because mediation had stalled.

Survivors "are facing a wall of opposition,” he said. “We are totally frustrated. This is an attempt to break the logjam. We are tired of waiting around.”

Sean Dolan, a spokesman for the diocese, said the church is trying to resolve the case. When the diocese declared bankruptcy, church officials said the potential cost of payouts stemming from cases filed under the state CVA left it facing financial ruin.

The diocese “is continuing to work in good faith towards a resolution of abuse claims, including those claims against parishes, in a way that lawfully, equitably, and fairly compensates survivors and allows the Church to continue her essential mission,” Dolan told Newsday on Thursday.

“The unfortunate decision on the part of the Unsecured Creditors Committee to choose the path of litigation consumes resources that could otherwise be available to survivors,” he added.

Proposal details

The proposed settlement calls for Catholic parishes on Long Island to pay about $200 million, and for the diocese to come up with more funds through the sale of 206 acres in Lloyd Harbor where its former seminary is located.

Another $80 million would come from Catholic Cemeteries of Long Island, while the diocese would sell FCC licenses and radio towers it owns. The diocesan education department would contribute $6 million, while one of the diocese’s insurance companies would add in $15 million, according to the plan.

Those sources and others would amount to about $450 million, but hundreds of millions more would come from other church insurance companies, Stang said.

“We have analyzed their financials and think that is a fair settlement,” he said. The proposed settlement would not disrupt the functioning of church missions such as schools and cemeteries, Stang said, partly because much of the money is cash and would not require the sale of properties.

The diocese could accept the settlement or the judge could impose it, though it is unclear either will happen, Stang said.

Money for survivors

The CVA allowed people during a two-year “look back window” to sue the church, schools and other institutions regardless of how long ago the alleged sexual abuse took place. Some of the diocesan cases go as far back as 1957, the year it was founded, according to court papers.

Papers filed by survivors’ attorneys Thursday allege that starting in 2017, with passage of the CVA looming, the diocese “transferred hundreds of millions of dollars to existing or newly-created affiliates, attempting to place the funds beyond the reach of the victims of sexual abuse.”

The lawyers said they want to make that money available to the survivors.

Besides the pending CVA cases, the diocese has already paid out $62 million to about 350 other survivors under a separate diocesan program that began in 2017.

The payout from the pending cases could be far higher, attorneys said. A 2007 case involving a youth minister who allegedly sexually abused two minors at St. Raphael's parish in East Meadow ended with an $11.45 million jury award to the victims, said Paul Mones, a Los Angeles-based lawyer  who handled the case along with attorney Michael Dowd and is representing some of the other survivors.

The diocese says it has already cut costs to deal with the sex abuse cases, including selling its headquarters in Rockville Centre for $5.2 million.

A major international law firm, Jones Day, is defending the diocese.

One court filing lists a payment to Jones Day of about $4 million for February through May 2022. A lead attorney for Jones Day was paid at a rate of nearly $1,600 an hour, though the firm wrote that it deducted a 10% discount.