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Buffalo Diocese embarks on path toward reorganization as it files for bankruptcy

Press Release

Fri, Feb 28th 2020 03:25 pm

Chapter 11 filing aims to provide resolution for the most number of individuals who have been harmed by past by sexual abuse while continuing the work of Catholic ministry

The Diocese of Buffalo has formally filed for Chapter 11 reorganization under the U.S. Federal Bankruptcy code with a primary aim of enabling financial resolution for the most number of individuals who have filed claims under the Child Victims Act – a year-long window that opened on Aug. 14, 2019, that suspends the statute of limitations related to allegations of past sexual abuse.

A further objective of reorganization is that it allows the Catholic diocese to continue uninterrupted its mission throughout Western New York, while working to settle claims with existing diocesan assets and insurance coverages.

"We have no more urgent work than to bring about justice and healing for those harmed by the scourge of sexual abuse. The intense emotional, mental and spiritual pain inflicted on these innocent victim-survivors is a heavy burden they are forced to carry throughout their lives," said Bishop Edward B. Scharfenberger, apostolic administrator of the Diocese of Buffalo. "Our decision to pursue Chapter 11 reorganization – arrived at after much prayer, discernment and consultation with the College of Consultors and our diocesan finance council – is based on our belief that this approach will enable the most number of victim-survivors of past sexual abuse in achieving fairness and a sense of restorative justice for the harm they have experienced. It will also allow the vital, mission-driven work of faith that is so essential to the residents of Western New York to continue uninterrupted."

Parishes of the diocese are separately incorporated under New York state's Religious Corporation Law and not included in today's filing. Similarly, Catholic elementary and secondary schools are also not part of the Chapter 11 case, given that they are owned by parishes or are separately incorporated entities. Catholic Charities of Buffalo, with its extensive ministries that serve residents throughout Western New York, providing critical social services, is also separately incorporated under New York's Not for Profit Corporation Law and will not be part of the filing. This is also true for the diocese's capital and endowment campaign, “Upon This Rock.”

The timeframe for completing Chapter 11 reorganization has not been defined. It is the diocese's hope to conclude this process at the earliest possible opportunity. Additional information, as well as Q&As, can be found at: www.buffalodiocese.org.

A Chapter 11 filing is a voluntary action taken by a company or entity in order to implement a financial reorganization, settle claims for those to whom it has a financial obligation and emerge after the process with its operations intact. Under Chapter 11, an entity generally maintains its normal operations. It continues to do business in a routine manner.

This press release came from the diocese.

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