Bishop Edward B. Scharfenberger told a large group of priests Monday that a decision on whether the Buffalo Diocese files for Chapter 11 bankruptcy protection "will be soon," but he did not definitely say the filing will happen, nor did he give a date for it.
Scharfenberger met in the afternoon with about 125 priests at St. Leo the Great Church in Amherst to discuss the likelihood of a bankruptcy filing and what it could mean for the diocese and its 161 parishes. Two lawyers from the Bond, Schoeneck & King law firm in Syracuse joined the bishop in fielding questions about a possible bankruptcy.
The session was another indication a bankruptcy filing could happen in the near future, although diocese spokesman Greg Tucker said the meeting had been scheduled for some time and included discussion on other topics, as well.
"It was a Q&A session on a range of things" not solely the possibility of bankruptcy, said Tucker after the session, which lasted about 90 minutes.
The Buffalo Diocese is named as a defendant in 258 cases filed under the Child Victims Act, more than any other institution in the state, and potentially faces huge losses if the cases go to trial or get settled out of court.
Scharfenberger indicated to priests there was a "high probability" of a Chapter 11 filing, and a "decision has to be soon; it will be soon," Tucker said.
"He talked about the implications and how this plays out. This is not the first diocese to contemplate or go down that path and so, obviously, there are questions and how does it play out. It was a chance to air some of that and take questions," Tucker added.
Scharfenberger told The Buffalo News in early January that a bankruptcy filing was a "probability" to help the diocese address its mounting legal claims, while still maintaining its mission.
The Buffalo Diocese would become the second diocese in New York to file for bankruptcy reorganization, following the Rochester Diocese, which filed on Sept 12. Since 2004, 22 dioceses across the country – including the Diocese of Harrisburg, Pa., just last week – have sought bankruptcy protection in their efforts to settle lawsuits over clergy sexual abuse of children.
Settlements in previous diocese bankruptcy cases have ranged from a low of $9.8 million in the Diocese of Fairbanks, Alaska, in 2010 to a high of $210 million in the Archdiocese of Saint Paul and Minneapolis in 2018. Insurance covered from 15% to 85%, depending on the diocese.
The Buffalo Diocese ended its 2019 fiscal year $5 million in the red, due primarily to a big decline in donations amid a clergy sexual abuse scandal.
Donations in 2019 fell by nearly a third compared to 2018, according to diocese’s latest financial statement, which described a Chapter 11 bankruptcy filing as “imminent."