Diocese Files for Reorganization
Most Reverend Douglas J. Lucia, Bishop of Syracuse, announced his decision to authorize the Diocese of Syracuse to file for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Find a letter from Bishop Lucia to the people of the diocese below, as well as a letter to Holy Cross parishioners from Fr. Kurgan, the diocesan press release, frequently asked questions, and the video of the press conference announcement below.
Letter to Holy Cross Parishioners
Dear parishioners and friends of Holy Cross,
I would like to take this opportunity to address the recent announcement by Bishop Lucia, Bishop of The Diocese of Syracuse. On Friday, June 19th, 2020 Bishop Lucia, after consultation with the Diocesan Finance Committee, the Diocesan College of Consultors, Pastoral Council, Pastors, Priests and Pastoral Leaders of the Diocese of Syracuse, announced that the Diocese of Syracuse entered into Chapter 11 reorganization. The reason the Diocese of Syracuse entered Chapter 11 is to ensure that victims of child sexual abuse who have made claims against the diocese can be justly compensated. Let me be clear that this action is not to hinder claims by victims of sexual abuse. It is just the opposite. The diocese could not guarantee that all claimants be compensated due to the number of claims brought against the diocese and the potential awards associated with those claims. Chapter 11 will allow the diocese to establish a fund and process by which claims will be treated in a just and equitable way for all victims. What does this mean for our diocese, parishes and schools?
Holy Cross Parish is its own legal entity, and is not included under the Chapter 11 proceedings. There will be no reductions in staff, programming, Masses, etc. due to this circumstance.
Holy Cross School falls under Holy Cross Parish and therefore will not be affected by the Chapter 11 proceedings. There will be no reduction in staffing or changes in programs due to these proceedings.
The Diocese of Syracuse will continue to maintain the vital ministries and mission of the Diocese.
Hope Appeal, Catholic schools, Catholic Charities and other entities associated with the Catholic Church of Syracuse are separate corporations and are not directly involved in these proceedings.
In the next week, you will be receiving a mailing from Holy Cross which will include Bishop Lucia's letter, and a communication from me. Please know I am praying for you!
Peace,
Fr. John Kurgan Pastor
Letter to the People
ROMAN CATHOLIC DIOCESE OF SYRACUSE
OFFICE OF THE BISHOP
240 E. O NONDAGA STREET, SYRACUSE, NY 13202-2608
June 19,2020
Solemnity of the Sacred Heart of Jesus
Dear Sisters and Brothers in the Lord,
Grace and peace be with you! Today, I write to share with you the news that after considerable consultation with Diocesan Administration, the Diocesan Finance Council, the College of Consultors, the leadership of the Diocesan Pastoral Council, and the Priests and Pastoral Leaders of the Diocese of Syracuse, I have authorized the filing of a Chapter 11 reorganization case for the Roman Catholic Diocese of Syracuse, New York before the United States Bankruptcy Court, Northern District of New York.
I have taken this action in light of the financial impact of the Child Victims Act (CVA) on the Diocese, as well as the economic downturn precipitated by the COVID-19 pandemic. When I became your Bishop on August 8th last year, it was just before the start of the CVA window and I was asked whether the Diocese would have to follow the paths of other dioceses in the United States who had made such filings. At the time, my answer was a hopeful "No" due to the Independent Reconciliation and Compensation Program (IRCP) conducted in recent years by the Diocese of Syracuse.
Unfortunately, this has proven not to be the case, and at present the Diocese has over 100 lawsuits pending against it. This number could grow, especially in view of the fact that the CVA window is expected to be extended until August 2021. Without a reorganization, the Diocese and claimants will face a slow, unpredictable and costly process that would require years of court involvement. Such a protracted process would delay justice for the victims and only prolong their pain and suffering. The challenge this situation presents our Diocese is simply that one jury award could so diminish our assets that we would have little or nothing with which to resolve the other claims or carry on the important ministries of the Diocese.
From the start of my ministry among you, it has been my intent to make reparation to all of the victims of sexual abuse for acts perpetrated against them by clergy, employees or volunteers of the Diocese of Syracuse. However, the growing number of CVA lawsuits against the Diocese presents a risk that those claimants who filed suits first or pursued their claims more aggressively would receive a much greater portion of the funds available to pay victims, leaving other claimants (potentially, even some who have suffered more) with little or nothing. In order to ensure that victim claims are treated justly and equitably, I feel it is necessary to enter into Chapter 11 where available funds will be allocated fairly among all victims in accordance with the harm each suffered.
I want to be very clear that this action is not to hinder claims by victims of sexual abuse. It is just the opposite! It seeks to establish a process by which claims will be treated in a just and equitable way. I know not everyone will see it in this manner and to those whose wounds are opened again or whose faith is shaken because of these proceedings, I am truly sorry. However, since my coming among you, I have not shied away from tackling the problems we face as a faith family. My approach has been to seek a balance; whether in parish planning and re-configuration, dealing with the Coronavirus, and now in helping both victims of sexual abuse and our Diocese to move forward from this sad and painful chapter.
On the Diocesan web page at www.syrdio.org you will be able to find the latest information on the Chapter 11 proceedings and follow its progression in the days ahead. Included will be a quick FAQ sheet to help you understand what today's announcement involves. The web page will also link to a report of the Diocese's response to past child sexual abuse claims and the important work of our Diocesan safe environment program. All claims of abuse are decades old, dating back from 1950 to the early 1990s.
It is important to note that it is only the corporation of the Roman Catholic Diocese of Syracuse, New York that has filed for reorganization before the U.S. Bankruptcy Court. The parishes within the Diocese, the Foundation including the Hope Appeal, Catholic Charities, Catholic schools, and other entities associated with the Catholic Church of Syracuse are separate corporations and are not directly involved in these proceedings.
Today's action will require the Diocese to be under court supervision in its Chapter 11 case for many months. However, after exhaustive study by myself and those in Diocesan Administration, I feel it is the only way we can address victims' claims in the most fair and equitable manner, while maintaining the vital ministries and mission of the Diocese.
It is my hope that during this process of reorganization and following its completion, we will continue to pray for the healing of those who had been harmed during this very dark chapter of the Church. As your Bishop, I must again, apologize for these heinous acts and ask you all to join me in our diocesan commitment that these acts will never take place again.
In this matter, we place ourselves under the loving care of the Sacred Heart of Jesus praying that He will make our hearts more like His through this time of purification and reparation. Please know my prayers for you and your loved ones continue and I ask humbly for your prayers for me and the Church of Syracuse.
In the Name of Jesus,
Most Reverend Douglas J. Lucia
Bishop of Syracuse
Press Release
Diocese of Syracuse Files for Reorganization
Syracuse, New York--
Most Reverend Douglas J. Lucia, Bishop of Syracuse, announced today his decision to authorize the Diocese of Syracuse to file for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing is before the United States Bankruptcy Court in the Northern District of New York.
The parishes within the Diocese, the Foundation including the HOPE Appeal, Catholic Charities, Catholic Schools and other entities associated with the Diocese are separate legal entities and are not part of the Chapter 11 filing.
As of today, the Diocese of Syracuse has over 100 lawsuits filed under the Child Victims Act. Bishop Lucia explained in a Letter to the Faithful, “Without a reorganization, the Diocese and claimants will face a slow, unpredictable and costly process that would require years of court involvement. Such a protracted process would delay justice for the victims and only prolong their pain and suffering. The challenge this situation presents our Diocese is simply that one jury award could so diminish our assets that we would have little or nothing with which to resolve the other claims or carry on the important ministries of the Diocese.” The Diocese believes Chapter 11 is the fairest course for all victims and the best course to ensure the Church carries out its mission to serve the people of this diocese.
As part of the Reorganization Plan, the Diocese intends to create a Victims Fund with a pool of funds from the Diocese and insurance carriers. The Diocese is working with insurance carriers to determine the extent of coverage.
Information on reorganization is available on the diocesan website: www.syrdio.org. This site will include up to date information and frequently asked questions about reorganization. It will soon contain a link to a webpage that will have links to all the court documents as they are filed.
“It is my hope that during this process of reorganization and following its completion, we will continue to pray for the healing of those who had been harmed during this very dark chapter of the Church”, stated Bishop Lucia. “As your Bishop, I must again, apologize for these heinous acts and ask you all to join me in our diocesan commitment that these acts will never take place again.”
For more information, contact Danielle Cummings, Chancellor/Director of Communications at 315.470.1476.
-end-
Frequently Asked Questions
What exactly is Chapter 11?
Chapter 11 is a voluntary action taken by a company or entity to reorganize financially with the goals of being able to respond to the financial claims of those to whom it owes money and to emerge with its operations intact. A Chapter 11 filing with the U.S. Bankruptcy Court immediately stops all efforts at collection of debts and legal actions against the entity. Chapter 11 does not mean the entity is going out of business or is insolvent. Under Chapter 11, an entity generally maintains its normal operations and continues to provide current employees with salaries and benefits and retirees with benefits. It continues to do business in a routine manner.
Who is filing Chapter 11?
Only the corporation of the Roman Catholic Diocese of Syracuse is filing Chapter 11. The parishes within the diocese, the Foundation including the HOPE Appeal, Catholic Charities, Catholic Schools, Syracuse Diocesan Investment Fund, and all other separately incorporated Funds and entities associated with the Catholic Church are not directly involved in the proceedings.
Why is the Diocese seeking reorganization under Chapter 11 now?
Following the passage of the NYS Child Victims Act in 2019, a legal window to file claims opened on August 14. As a result, the diocese faces multiple claims of sexual abuse of a minor, all dating back decades. Litigation costs and settlements or jury awards will exceed many millions of dollars. The diocese simply does not have enough resources to settle or litigate these claims fairly and equitably.
What if the Diocese didn’t file for Chapter 11?
Those claimants who filed suits first would receive all available funds to pay victims. As a result, later claimants would receive nothing. Most importantly, such lengthy proceedings delay justice for the victims and only prolong their pain and suffering.
Who made this decision to file for reorganization under Chapter 11?
The Bishop of Syracuse made this decision in consultation with diocesan administration, the Finance Council, the College of Consultors, leadership of the Diocesan Pastoral Council, priests and pastoral leaders, and lay professionals.