Parishes will pay $80 million in Buffalo Diocese’s $150 million bankruptcy settlement

Parishes in the Diocese of Buffalo, N.Y., are set to pay a total of $80 million into the diocese’s $150 million bankruptcy settlement, with the funds due to be paid into a trust by July 15.

“As we have maintained throughout this protracted process, the participation of the entire Catholic family is necessary to bring to a close this painful chapter of our diocese and achieve a level of restitution that is owed to the many who have had to carry the tremendous burden of physical, emotional and spiritual harm of sexual abuse throughout their lives,” said Bishop Michael W. Fisher, a Baltimore native, in a June 9 statement.

Of that $150 million, the diocese will also directly pay $30 million, with its affiliated Catholic organizations contributing $10 million, and real estate sales covering the remainder, diocesan communications director Joe Martone told OSV News.

Martone said the diocese hopes that insurance coverage will realize an estimated additional $150 million for claims, although the diocese is “still in negotiation with the insurers.”

The bankruptcy settlement, agreed to in principle April 22, will resolve the five-year-long proceedings, which began in 2020 to address what now amounts to “approximately 891 cases” — making for “one of the highest caseloads in the country,” Martone previously told OSV News.

All of the claims had been brought under the Child Victims Act, or CVA, which was passed by the New York Senate and signed into law in 2019.

The CVA extended the state’s former statute of limitations by granting a one-year look back for time-barred civil claims to be revived, giving survivors until age 28 to press charges for felonies and age 25 for misdemeanors, and allowing survivors up to age 55 to bring lawsuits.

Martone told OSV News June 10 that “nearly 50 percent of our parishes” were implicated in the claims.

As part of its Chapter 11 filing, the diocese had sought a channeling injunction, which creates a settlement trust into which claims are funneled. By paying the $80 million into the settlement, parishes will, through the injunction, receive protection from future claims, which are a possibility, said Martone.

“There’s been talk in New York, as there has been in other states, that the window is going to be continually open for past claims,” both for childhood and adult survivors, he said. “So we could potentially see historical claims rise again. And if a parish gives a meaningful contribution, we’re of the understanding that they could be indemnified from those future historic claims.”

Martone explained that the parish contributions to the settlement — which are taken from unrestricted funds — range from 10 to 75 percent.

In a June 9 statement, the diocese noted the contribution “is based upon a progressive percentage applied to the parishes’ self-reported and unrestricted assets held as of Aug. 31, 2024, the end of the diocesan fiscal year.”

Parishes set to merge and close under the diocese’s “Road to Renewal” pastoral restructuring initiative, announced in 2020, will be assessed at 80 percent, said Martone. That amount holds even if those parishes appeal their closure to the Vatican, with the difference between the 80 percent and the amount they otherwise would have been assessed refunded to them.

Martone said the parish payments are “structured in such a way that it would not bankrupt those parishes,” although each will make “a significant contribution.”

“Those parishes that have reserves under a certain threshold will only be assessed 10 percent, and then that progressively goes up to 75 percent for our most wealthy parishes,” he said, adding the payments will “not deplete them; they can continue to function.”

The diocese itself is selling its headquarters and other properties, with its former Christ the King Seminary sold in February for $4.2 million to the World Mission Society Church of God.

However, most of the seminary sale proceeds can not be applied toward the settlement, since they are subject to a legal doctrine safeguarding donors’ intent — which was indicated by records of the historical donations to the seminary effort, wrote Chief Bankruptcy Judge Carl L. Bucki for the Western District of New York in his June 6 ruling.

Layoffs of diocesan staff are not presently under consideration, Martone said, since the diocese has “gone through major downsizing already,” having reduced its workforce from some 300 to about 80 since 2017.

He told OSV News that through the “Road to Renewal” initiative, “approximately 80 churches will merge and close,” of a total of 160 parishes and 36 worship sites across the diocese’s eight-county region.

Selling a closed Catholic church — which under canon law must first be relegated by the bishop for “profane” (that is, secular) but not “sordid” (morally offensive or inappropriate) use — can be a challenge, Martone said.

“We’ve found that in the rural communities, if the sale price is under a million dollars, those properties are seeming incredibly marketable,” he said, although “if a property is over a million dollars in more of an urban area, it’s more of a challenge.”

Overall, “the reuse of a church is tricky for a developer, because of the physical size of it,” said Martone. “What do you do with it? Does it become residential? Does it become another type of worship site? … There are restrictions in canon law on what they (relegated churches) can be used for. So it does handcuff some developers on what can happen to the building. It’s just really tricky.”

The diocese is currently holding a series of meetings with clergy, trustees, business managers, and finance and parish council chairs, providing each with an overview of the total $150 million settlement and a detailed statement of their parish’s expected contribution.

Martone told OSV News that the meetings are an effort to counter “a lot of misunderstanding right now.”

“There’s just a lot of anger toward the church about our past sins, and we could never apologize enough for what went on,” said Martone. “We’re just trying to take care of this now and trying to move beyond bankruptcy and get settlement for these people. Not that it provides closure for them, but at least (they) get some recompense.”

In the process, he said, “we’re trying to preserve as many parishes as we can moving forward … emerging from bankruptcy and continuing on with the mission of the church.”

To date, six of New York’s eight Roman Catholic dioceses have filed for bankruptcy, with the Archdiocese of New York and the Diocese of Brooklyn so far avoiding Chapter 11 proceedings.

Along with the Diocese of Buffalo, bankruptcy filings for the Albany, Ogdensburg and Rochester dioceses are in process.

The Diocese of Syracuse announced in 2023 that it had reached a settlement, which had to be revised after a Supreme Court ruling impacted creditor consent for non-debtor releases in Chapter 11 cases. The new plan, which survivors have overwhelmingly backed, will be considered in court later this month.

In 2024, the Diocese of Rockville Centre reached a $323 million settlement with survivors.

OSV News found that since 2002 — the year in which the U.S. Catholic bishops adopted their “Charter for the Protection of Children and Young People” — the nation’s dioceses have paid at least $5.6 billion in abuse settlements and related costs.

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