A Buffalo Diocese lawyer suggested that Attorney General Letitia James’ lawsuit against the diocese over its handling of priests accused of sexual abuse was a “publicity stunt” and may have violated bankruptcy court rules designed to protect bankrupt entities.
Stephen A. Donato, who represents the diocese in its Chapter 11 bankruptcy filing, told Chief Judge Carl L. Bucki that the diocese was seeking to settle the lawsuit filed in November. He also said that the diocese already was doing much of what the Attorney General’s Office requested it do to protect children from sexual predators.
“With the utmost respect, I don’t even understand why this lawsuit was commenced, other than maybe a publicity stunt,” Donato said in a court hearing this week.
The lawsuit accused diocese leaders of not sufficiently investigating abuse allegations and of protecting more than two dozen priests accused of abuse by not referring their cases to the Vatican for potential removal from the priesthood. While not seeking monetary damages, the lawsuit seeks a court injunction that forces the diocese to investigate all abuse accusations, inform the public of credible allegations and enact and enforce policies to prevent a culture of protecting abusers, among other measures.
“Our lawsuit speaks for itself. Individuals who are victims of abuse deserve to have their claims timely investigated and determined, which the Diocese of Buffalo refused to do. We remain steadfast in our work to ensure transparency and accountability throughout the dioceses of New York State," said Morgan Rubin, spokeswoman for the Attorney General’s Office.
The creditor’s committee that represents survivors of childhood sex abuse in the Buffalo Diocese’s bankruptcy case is opposing the diocese’s efforts to hire additional lawyers, in particular former New York Attorney General Dennis C. Vacco.
Donato maintained that the diocese already is doing the “lion’s share of all of what the attorney general has asked for.”
He made his remarks at a hearing Wednesday in U.S. Bankruptcy Court in the Western District on whether the diocese should be allowed to hire the Jones Day law firm to defend against the attorney general’s lawsuit. The diocese also seeks to hire the Lippes Mathias Wexler Friedman law firm to represent retired Bishop Richard J. Malone and retired Auxiliary Bishop Edward M. Grosz, both of whom are named individually as defendants in the lawsuit.
Attorneys for child sex abuse survivors have pushed back strongly against both requests, arguing that the diocese shouldn’t be litigating against stipulations aimed at protecting children from sex abuse. The cost of hiring more lawyers will waste money that should be going toward a settlement for abuse survivors, they added.
“The committee very seriously questions why the diocese is going to oppose this in any way, shape or form,” said Ilan Scharf, attorney for the committee of unsecured creditors, which consists of child sex abuse survivors.
If it is true that most of what the attorney general is seeking already is in place, “that does not take a law firm charging $800 to $900 an hour to negotiate,” added attorney Richard Weisbeck, who represents about 30 plaintiffs in Child Victims Act cases against the diocese and other Catholic entities. “The current attorneys should negotiate the settlement, which should be easy, given that all these remedies supposedly are already in place.”
Whether the general public will be able to examine the confidential records someday remains unclear and likely will be subject to intense negotiations during the bankruptcy proceedings.
Donato also left the door open for the diocese to seek a ruling that would disallow the attorney general’s lawsuit under automatic stay provisions of the U.S. Bankruptcy Code. A bankruptcy filing typically “stays” – or puts on hold – any lawsuits against the entity that filed for Chapter 11 protection.
But there is an exception to that for government entities exercising police or regulatory powers, and Donato said his firm’s “initial analysis” is that the attorney general’s lawsuit does not appear to be a violation of the automatic stay provision.
“We’re still reviewing it,” he added. “There is a possibility that we may make the determination that there is a stay violation.”
In an affidavit submitted to the court, Bishop Michael W. Fisher said that the diocese was concerned that the attorney general “seeks to exercise state control over internal church operations,” contrary to protections under the establishment clause of the First Amendment.
The diocese wants to retain the Jones Day firm as “special counsel” for the lawsuit, which alleges that diocese leaders protected more than two dozen priests accused of child sexual abuse by not referring their cases to the Vatican for potential removal from the priesthood.
Fisher said he wants to hire Jones Day because of its experience in representing religious institutions on First Amendment issues.
In bankruptcy proceedings, a judge must approve the hires of any professionals that do work for a debtor organization. The diocese is due to respond by Feb. 26 in state court to the attorney general’s lawsuit.
Bucki indicated he would make a written ruling on the diocese’s requests as soon as possible.