Catholic Diocese of Albany Might Face Bankruptcy Due to Lawsuits Alleging Sexual Abuse


Due to the allegations of sexual abuse, the Catholic Diocese of Albany is on the verge of bankruptcy. The church reportedly filed bankruptcy protection recently, making them the fifth of eight dioceses to take action.

The bankruptcy of the Catholic Diocese of Albany

In New York, the statute of limitations was temporarily waived so that victims of childhood abuse may pursue even decades-old allegations against clergy members, teachers, boy scout leaders, and others. The Catholic Diocese of Albany and other dioceses in the state are currently coping with a flood of lawsuits due to this change.

According to Crux, after months of negotiations about a potential settlement, Bishop Edward Scharfenberger of the Albany Diocese announced that the diocese would apply for Chapter 11 bankruptcy protection. The conversations occurred between the upstate New York diocese and attorneys representing plaintiffs. Scharfenberger said that the decision to file was not made lightly, and he knows it may cause anguish and distress. Still, he is confident that the church will persevere through this challenge and emerge even more unified and powerful.

The bishop stated that because of the increasing number of cases paid under the state's Child Victims Act, "our limited self-insurance funds, which have been paying those settlements, have been depleted." Bishop Scharfenberger also said that filing for bankruptcy was the most excellent method to assure that all surviving parties with outstanding litigation got some form of compensation.

In addition, the measure halts legal actions against the diocese and will allow it to draft a reorganization plan to determine the available assets in the diocese's possession. Recently, numerous dioceses around the country have sought the protection of the bankruptcy court. In New York, the diocese centered in Albany is the fifth of eight to take the move. Other New York dioceses that have taken action include Rockville Centre on Long Island, Buffalo, and Rochester.

Moreover, bankruptcy protection was defined by Value Healthcare Services as a status of an individual or company where they are unable to repay all of their debts in full. The procedure for obtaining bankruptcy protection can be started by either the debtor themself or the court, depending on the particular circumstances.

Also Read:Connecticut Catholic School's Alumni Rally to Rescue School Amidst Diocese's Sex-Abuse Bankruptcy

Sexual Abuse Allegation in Catholic Diocese of Albany

Based on an article from Herman Law, many clergy members in the Diocese of Albany in New York have been accused of sexual misconduct with minors. These individuals finally gave back their voices and named 83 members of the Diocese of Albany. They shared their horrifying stories of abuse after the 2019 Child Victims Act prolonged the limitations period and gave victims of child sex abuse one year to take action.

Moreover, the pandemic pushed the legislators to extend the deadline on August 14, 2021. It was the cut-off date for anyone in New York who has suffered child sex abuse from a church member's hands to come forward, regardless of age or the time since the abuse occurred. The legislature of New York enacted the Child Victims Act in recognition that many victims do not come forward about the traumatic experiences they endured as children until much later in life after they have had some time to process the incidents that happened to them.

Accordingly, the Diocese of Albany was named as a defendant in 52 lawsuits alleging sexual misconduct with minors on the part of its clergy dating back as long as 63 years. In response to the Child Victims Act of 2019, many additional cases were being prepared at that time, with the Albany Diocese facing more than 100 lawsuits.

Related Article:San Diego Catholic Church Could Face Bankruptcy Filing to Compensate Victims of Sexual Abuse Scandal