Diocese of Norwich files for Chapter 11 bankruptcy
Norwich — The Roman Catholic Diocese of Norwich announced Thursday that it filed a voluntary petition for bankruptcy and reorganization, calling it "the most equitable way" to resolve more than 60 pending lawsuits filed against the diocese alleging the rape and sexual abuse of boys who attended the former Academy at Mount Saint John in Deep River.
In a video posted to the diocese's website, Bishop Michael Cote said this "is probably the most important news that I have had to deliver in my 18 years as the shepherd of the Diocese of Norwich," and it was "only taken after two years of careful deliberation and prayer."
This filing under Chapter 11 of the federal Bankruptcy Code puts legal actions on hold, and Judge James T. Tancredi will hear bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Connecticut in Hartford.
The court will set a deadline to file financial claims against the diocese, and the diocese said it will negotiate in good faith to reach settlements with abuse survivors and approved creditors.
"It's not good news for anyone," said Gail Howard, one of the co-leaders of the Connecticut chapter of the Survivors Network of those Abused by Priests, or SNAP. She said if there's a date after which victims can't file, anyone older than 51 who is currently excluded by the state's statute of limitations is out of luck even if the state legislature eliminates the statute.
It is expected that early next year, the General Assembly again will consider a bill that would create a window for victims of any age to file a lawsuit. 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they were sexually assaulted as children by priests assigned to the diocese, if the statute of limitations were repealed.
"This is going to be tremendously discouraging for the survivors who have gone to the legislatures, who have petitioned their legislators now for years, to get them some help, and these are people who don't have a lot of money," Howard said.
But 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."
"If the Diocese had not filed for bankruptcy, it would be unable to ensure that all of the individuals who file claims are treated fairly and have equal access to the funds available," he said.
Mount Saint John's was a residential school for troubled boys in Deep River where the late Christian Brother K. Paul McGlade is accused of sexually assaulting many of them from 1990 to 2002.
The diocese said nearly 60 of those men are now seeking damages that exceed the diocese's current ability to pay. Former Bishop of Norwich Daniel Reilly, now retired, served as the president of the school's board of trustees during the period of the alleged assaults by McGlade. Records show the Norwich diocese requested to have McGlade transferred to the Deep River school from Australia, where he also has been accused of sexually assaulting young boys. It is not clear why the Norwich diocese sought the transfer.
In November 2020, the diocese revealed that it has been investigating the extent of abuse of children by priests assigned to the diocese dating back to 1953. The diocese said it would release the results of the investigation in a public report. One has not yet been issued.
According to resolutions from Cote included in the bankruptcy filing, the diocese has resolved to employ New York-based Ice Miller LLP as general bankruptcy counsel, Hartford-based Robinson & Cole LLP as co-counsel, Norwich-based Brown Jacobson P.C. as special counsel, B Riley Advisory Services as financial adviser and Epiq Corporate Restructuring LLC as administrative adviser and claims, noticing and balloting agent.
"Where's the money coming for that?" Howard questioned. She added, "They're going to get the best and the brightest to help them do damage control."
Also in the resolutions, Cote said he engaged in discussions with the other trustees of the diocese, the Diocesan Finance Council and the College of Consultors about the assets and liabilities of the diocese. The diocese estimates its assets at between $10 million and $50 million, and its liabilities between $50 million and $100 million.
The diocese said its parishes, schools and cemeteries aren't included in the bankruptcy, as they are separate legal entities, and the filing isn't expected to have an impact on the employment, salaries or benefits of employees or retirees.
The diocese said the bankruptcy also won't affect the administration of the sacraments, and it plans to continue to fund ministry services such as Catholic Charities and St. Vincent de Paul Place.
According to the bankruptcy petition, no bankruptcy cases have been filed by or against the diocese in the past eight years, and no business partner or affiliate of the diocese has a bankruptcy case pending or being filed.
But Cote noted that advisers told him more than 30 diocesan, archdiocesan and religious institutions have taken this step "in order to fairly compensate victims of abuse while also continuing to carry out the spiritual, charitable and educational mission of the church."
John "Tim" McGuire of New London, who went public in 2018 about being sexually abused as an 8-year-old by the late Rev. James Curry at St. Joseph's Church in Noank, said the Diocese of Norwich bankruptcy isn't surprising, because it's been happening all over the country — but it is "demeaning to all the victims."
He said the diocese operates like a business, and said men of God should be going to the victims to ask for forgiveness but instead they're running to their lawyers. He said the diocese was issuing a "contrived, damage control statement that doesn't match their actions."
"They got it backwards," McGuire said. "I would think you would address the moral bankruptcy in the church first, then the financial one."
Editor's Note: The video with this story was released by the Diocese of Norwich on Thursday, July 15, 2021.
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