Norwich — The monetary claims by people who say they were sexually abused by priests exceed the Diocese of Norwich's assets by tens of millions of dollars, meaning the diocese's bankruptcy filing likely will limit payments to victims. 

The Roman Catholic Diocese of Norwich stopped its 17-month-long investigation into the sexual assault of children by its priests after filing for bankruptcy earlier this month. It appears that people who allege they were sexually abused by priests and other members of the diocese, but are barred by the statute of limitations from filing lawsuits in state court, will be able to file claims during the upcoming bankruptcy process.

However, it also appears the awards to people who file claims against the diocese through the bankruptcy process will be far less than what they could have received through the judicial system.

The diocese originally had asked the bankruptcy court to redact all information about its finances, debts and assets from the public court filings but reversed course during a hearing this past week as victims and their attorneys were expected to oppose the move. 

New London attorney Kelly Reardon, whose firm has won millions of dollars in settlements for victims of sex assaulted by diocesan priests, said bankruptcy in cases such as this is never a good thing for victims because the payments are diminished.

"But I'm at least hopeful we can work through the process and the diocese will be transparent about its assets to determine the maximum amount of assets that are available to the victims," she said.

She added one downside of a bankruptcy proceeding is the longer it goes on, the more of the assets go toward attorneys' fees and other bankruptcy costs. "We want to make sure this is quickly resolved so the biggest percentage possible of the assets goes to the claimants," she said. "If this drags on for years, it will be a disaster."

The bankruptcy filing lists the diocesan assets at $10 million to $50 million but its liabilities at $50 million to $100 million. In past years, settlements paid to individual victims who sued the diocese averaged about $1 million each.

Not all of the assets will go to the victims, as the diocese has other debts and also needs to retain some of its assets to continue to operate.

Asked about how bankruptcy will ensure fairness when diocesan assets do not cover its own estimate of damages, diocesan attorney Louis DeLucia wrote, "The precise reason and in fact, one of the purposes of the bankruptcy is to make sure that all legitimate claimants get their fair share of available funds in the settlement pool, otherwise the first plaintiff to get a judgment and execute on it could potentially collect most of the assets, leaving nothing for other claimants. The Bankruptcy is in fact the only way to ensure fair and equitable distribution to all claimants."

Thirty-one dioceses around the country facing sexual assault lawsuits have filed and obtained bankruptcy protection. In some of these cases, the dioceses have been accused of trying to hide and shield their assets to limit payouts to victims. Reardon said she has no reason to believe that is taking place in the Norwich diocese.

Hartford attorney Patrick Tomasiewicz, who represents most of the victims from the former Academy at Mount Saint John in Deep River, declined to comment on the bankruptcy proceedings. 

The announcement 

On July 15, Bishop Michael Cote announced that the diocese had filed a petition for bankruptcy and reorganization, calling it "the most equitable way" to resolve the more than 60 lawsuits filed against the diocese by young men who says they were raped and sexually abused while attending Mount Saint John.

Mount Saint John was a residential school for troubled boys, where the late Christian Brother K. Paul McGlade and others are accused of sexually assaulting a large number of boys from 1990 to 2002. 

The school's board of directors was headed by retired bishop Daniel Reilly, who during his career transferred priests suspected of molesting children, failed to report what he knew to police and fought the release of documents and attempts to depose him, according to lawsuits, depositions, court documents and interviews with attorneys and victims. 

Cote said in a news release that a "Chapter 11 bankruptcy will allow the Court to centralize these lawsuits, as well as help the Diocese manage its litigation expenses and preserve adequate financial resources for all essential ministries."

In a video that accompanied the announcement, Cote said the bankruptcy would compensate victims while allowing the diocese to continue to carry out its mission. He also promised that the bankruptcy process would be "completely transparent" and said the step was taken "after two years of careful deliberation and prayer."

This filing froze all legal actions until the bankruptcy court decides how to to distribute money to victims. This means no new cases can be filed against the diocese in Superior Court and current cases do not move forward.  

Bankruptcy process

The bankruptcy filing has put a series of actions into motion. A seven-person committee made up of victims will be assembled to protect the interests of the claimants. That committee will hire an attorney who will be paid for by the diocese. The diocese said it will work with the creditors' committee to determine its assets and how they will be allocated to each victim. The bankruptcy judge also will establish a deadline by which all claims against the diocese have to be filed. That date will be advertised. Victims do not have to have previously filed a lawsuit to submit a claim.

Reardon, who represents seven of the Mount Saint John victims, said she is encouraging victims of any age to submit a claim, even if they are prohibited from filing a lawsuit.

In a written response to a question from The Day on whether the diocese would oppose claims from people outside the statute of limitations, DeLucia, the diocesan attorney, wrote that "anyone can file a claim, whether it is found to be eligible for compensation will be determined through the bankruptcy process."

The judge eventually will approve the bankruptcy plan. Before that there will be a series of hearings, the next of which is slated for Aug. 17.

Those who do not submit claims by the deadline will not be able to sue the diocese in the future even if the General Assembly votes to increase or eliminate the statute of limitations. It is expected that early next year, the General Assembly will again consider a bill that would create a window for victims of any age to file a lawsuit. Currently, state law prohibits anyone over age 51 from suing over childhood sexual abuse. Several men in their late 50s and 60s in southeastern Connecticut have told The Day they likely would file lawsuits against the diocese, alleging they were sexually assaulted as children by priests assigned to the diocese, if the statute of limitations were repealed.

DeLucia also wrote that the more people that are eligible to file for damages will reduce the individual recoveries to existing victims who have filed lawsuits, "as the amount of money and assets from which to pay such claims is finite." 

Individual parishes not included

The diocese said its parishes and schools are not included in the bankruptcy, as they are separate legal entities. But Reardon said it is possible individual parishes could join the bankruptcy action.

Because the parishes are separate corporations with their own assets and not part of the diocesan bankruptcy filing, they could be sued by victims, especially if the General Assembly eliminates the current statute of limitations. For most parishes, having to pay out millions of dollars in compensation to victims could devastate their finances and endanger their future. 

In the past, victims have sued the diocese, retired Bishop Daniel Reilly and the parishes where the sexual assaults allegedly took place. When these cases were settled, the diocese and its insurance company paid the damages. But with the diocese unable to be sued due to bankruptcy protection, the parishes could become the target of lawsuits.

Asked about the exposure for the parishes, DeLucia wrote, "This will be dealt with in the bankruptcy and reorganization plan." 

Reardon explained that to get the benefit of the bankruptcy protection and avoid being sued in the future, parishes would have to contribute some of their own assets to the fund that will be distributed to victims. The diocese said the amount a parish would pay to become part of the bankruptcy protection plan would be negotiated with the parish. Reardon said each individual parish would have to weigh how many lawsuits it could face in the future against how much of its assets it would have to contribute to the victims' fund.

Investigation on hold 

In November 2020, the diocese revealed that it had been investigating the extent of abuse of children by priests assigned to the diocese dating to its founding in 1953. Cote announced at the time that retired state Superior Court Judge Michael E. Riley had been hired to lead the probe. The diocese had said it would release the results of the investigation when it was completed. 

"Once the decision was made to file for bankruptcy and reorganization, the investigation was put on hold in order to preserve funds for the survivors and other claimants," DeLucia wrote to The Day. "Investigations are very costly and since the bankruptcy is a transparent process, anything that would have been found in the investigation will be revealed during the course of the bankruptcy proceeding. All parties agreed this was the prudent way to move forward and that once the bankruptcy proceeding was seen as inevitable, there was no reason to continue spending significant sums of money monthly investigating what will be revealed through the bankruptcy process."

Gail Howard, one of the co-leaders of the Connecticut chapter of the Survivors Network of those Abused by Priests, criticized the decision, saying the results of the investigation and the completed report will not be publicized during the bankruptcy process.

"They've been hiding the truth and they are continuing to hide the truth," she said. 

That was the second investigation conducted by the diocese.

In February 2019, the diocese released the names of 43 priests who have served in the diocese and have had "allegations of substance" made against them regarding sexual abuse of minors. The list did not include which parishes the priests served, what they were accused of doing nor whether the diocese reported them as required by law to police or the state Department of Children and Families.

Prior to the release of the list, The Day had identified 28 priests and brothers affiliated with the diocese who have been accused of sexually assaulting children and adults. Six of these priests were not on the list released by the diocese.

Why did diocese bring McGlade to Mount Saint John? 

Before coming to Mount Saint John to serve as its executive director, McGlade and another Christian Brother, Paschal Alford, who also is accused of assaulting boys at the school, were teaching in Australia, where McGlade also has been accused of raping and sexually assaulting boys. 

The Day asked the diocese why it requested to move McGlade from Australia to Mount Saint John when his superiors in Australia had raised questions about his need for spiritual direction and counseling. 

DeLucia responded in writing that, "These questions assume certain facts as true — but they are not adjudicated. They are allegations asserted in a pending state court case about Mount Saint John and the Christian Brothers. Allegations made in a complaint are just that, allegations, they are not necessarily true and have not been proven."

David McFadden, who alleges he was assaulted by McGlade, recently received a settlement from the diocese. In his case, a 1989 agenda from the Provincial Council of the Christian Brothers in St. Patrick's Province states the council has decided to approve McGlade "taking up the Norwich offer" with several conditions.

These included that Norwich pay all expenses and that McGlade, an Australian who died in 2013, obtain "spiritual direction and counseling to deal with discernment agendas in hope that Paul will grow beyond current province image as a person of self pity and scape goating."

Told about the bankruptcy in Norwich, McFadden said by email, "sadly what the church has done does not surprise me as I follow the aftermath of that monster!"

j.wojtas@theday.com