Following months of development and consultation, the Roman Catholic Diocese of Albany is unveiling the draft of its Victims/Survivors Compensation Plan (VSCP) which is seen as an equitable alternative to litigation or to chapter 11, a lengthier and costlier process. If approved by Victims/Survivors of clergy abuse and the courts, the new program will direct more funds to Victims/Survivors in the least amount of time. The Diocese will also renew and strengthen its commitment to reach out to and help Victims/Survivors with hope and providing them a path towards spiritual healing.
This is a draft plan. It is not final, but we want to share progress to this point to let the Victims/Survivors who have pursued a claim through the CVA, know that this is another option to consider that may better protect their interests and get more assistance to them. Of course, any settlement cannot be the final word on the healing process, and the Albany Diocese is committed to seeing Victims/Survivors through their healing journey. The VSCP will feature commitments by the diocese to provide programs for ongoing healing and pastoral care of survivors and their families, as well as enhancement of its current prevention programs, including training and background screening of all clergy, lay employees, and volunteers who work with children, as well as age-appropriate awareness training for children. The diocese will continue to offer all those who may have been abused by clergy, the opportunity for counseling and emergency assistance through its office of Assistance Coordinator.
“Sex abuse is a blight on our society that affects and harms so many innocent people,” said Bishop Edward B. Scharfenberger. “As a Church and as a community of faith, we recognize that the Victims/Survivors are our sons and daughters, our brothers and sisters, and all of us, without exception, must find ways to assist them in their recovery.”
To date, the Diocese has been named in more than 400 Child Victims Act lawsuits which were filed between Aug. 15, 2019, and Aug. 14, 2021. Implementing the VSCP means the Diocese will not file for protection under chapter 11 of the Federal Bankruptcy code. If the Diocese were to file, based on the experience of other dioceses in New York and across the country, administrative/legal fees would be in the millions. The Diocese projects administrative/legal fees for the VSCP will be much less than chapter 11 legal fees, meaning there will be more money available for Victims/Survivors.
The VSCP will be reviewed by Hon. L. Michael Mackey, justice for the Albany County Supreme Court in the Third Judicial District of New York. Judge Mackey has been hearing CVA cases filed against the Diocese.
“We have been working on this plan for well over a year now, consulting with many experts in the field of restorative justice,” said Bishop Scharfenberger. “Our goal has been to make sure the limited resources of the Diocese can be distributed and applied in the most equitable way possible, also limiting the attorney’s fees so more can get to the Victims/Survivors.’”
Leading up to the approval of the plan, Diocesan officials had conversations with Victims/Survivors, their attorneys, and representatives of Diocesan insurance companies that will assist in funding the plan.
The plan creates a trust funded by available diocesan assets, proceeds from insurance carriers and insurance proceeds, and anticipated dedicated assets of co-defendants (i.e.: religious communities, etc.). Parish participation in the trust is still under consideration.
Hon. Joan N. Feeney (Ret.), who spent almost 27 years on the bench of the United States Bankruptcy Court for the District of Massachusetts and 23 years as a member of the United States Bankruptcy Appellate Panel for the First Circuit, is serving as a program consultant. Judge Feeney and other consultants developed the plan.
“The Diocese of Albany is committed to this compensation plan,” Bishop Scharfenberger said. “We will take part in good faith, transparent negotiations. A claims administrator will review each case and determine what will be awarded, and then it will either be accepted or rejected by the Victim/Survivor.”
Two financial advisory firms are also consulting. Keegan, Linscott & Associates, PC (Tucson, Ariz.) and UHY LLP, Certified Public Accountants (Albany) are reviewing diocesan assets to identify which assets are available to fund the plan. The law firm of Murphy & King (Boston, Mass.) is reviewing diocesan transactions to determine whether they were conducted with fair consideration. These are experienced, skilled, qualified firms with a history of consulting on bankruptcies across the country.
Establishment of a Trust
The purpose of the trust is to assume responsibility for preserving, managing, and distributing trust assets to Victims/Survivors holding allowed tort claims in accordance with the trust agreement and the requirements of the plan, after payment or reserve for payment of the costs and expenses of administering the trust. Trust assets include all property transferred to the trust pursuant to the plan and the settlement agreement.
An independent mediator (a neutral attorney appointed) by the court, will assist mediation participants in reaching a settlement of the amounts of the contributions to be made by the Diocese and the settling insurers to the trust. Mediation participants will be required to participate in good faith in the mediation of all disputes to reach a settlement.
Any Victim/Survivor who receives an award is free to go public with information about it if he or she so desires. The Albany Diocese will never require but will always honor confidentiality.
Every 30 days, the mediator will submit a progress report to the court on the status of the mediations. Within four months after the initial mediation session, the mediation participants will report on the settlement of the disputes among the parties, or request that the court allow additional time for reaching a negotiated settlement.
The trustee will prepare, periodically, a written accounting of the administration of the trust listing the current trust assets with fair market values and detailing all transactions that occurred during the period covered by the accounting. Each accounting will be filed with the court for as long as the case remains open and pending before the court. Copies of the accounting shall be available to the beneficiaries upon request. However, the trustee will redact all confidential and personal identifying information from all accountings or reports filed with the court or provided to any beneficiary.