Albany Diocese Files for Bankruptcy Amid Sexual Abuse Lawsuits

The Roman Catholic Diocese of Albany has filed for Chapter 11 bankruptcy protection in New York as it, like other dioceses in the state, faces hundreds of lawsuits by survivors of sexual abuse by priests.

Bishop Edward B. Scharfenberger of Albany said the church filed reluctantly as it believes “global mediation would have provided the most equitable distribution” of the diocese’s resources for victims.

However, the bishop added, the church’s “limited self-insurance funds” have been depleted in settlements.

The Chapter 11 filing will halt legal actions against the diocese. Scharfenberger said this will allow the diocese to develop a reorganization plan to determine the available assets and insurance proceeds that can be used to negotiate settlements for other survivors in addition to other creditors.

But a lawyer for survivors criticized the church for “exploiting bankruptcy as a legal tactic” given the $600 million in publicly reported assets that the diocese and its affiliates own.

“We urge everyone to see the diocese’s strategy for what it is: chicanery designed to perpetuate a $600 million corporation’s pattern of decadence, deception, and denial,” said attorney Jeff Anderson.

To date, the diocese says it has been named in more than 400 lawsuits which were filed between Aug. 15, 2019, and Aug. 14, 2021. It has separately settled more than 50 cases.

New York lifted its statute limiting civil lawsuits for victims of childhood sexual abuse for two-years. Churches, schools and Boy Scout organizations in the state saw a rise in lawsuits during the two-year window that ended in August 2021.

With the Albany diocese’s filing, five of New York’s eight Catholic dioceses have now filed for Chapter 11 bankruptcy protection from sexual abuse lawsuits. The others are Buffalo, Rochester, Rockville Centre and Syracuse.