Diocese of Norwich expects to have proposed bankruptcy plan by April 1
An attorney for the Diocese of Norwich told a federal bankruptcy court judge on Wednesday that it expects to file a proposed bankruptcy plan by April 1 to resolve claims by at least 70 people who say they were sexually assaulted by priests and employees affiliated with the diocese.
During the remote hearing before Judge James Tancredi, attorneys for both the Roman Catholic diocese and the committee that represents the claimants also agreed to a plan that temporarily would limit the large sums of money being spent by the diocese on legal and financial services fees. Over the past few months attorneys for the alleged victims — as well as Tancredi — have expressed concern that the millions of dollars in fees will reduce the money that eventually will be available to distribute to the victims.
Tancredi told the attorneys Wednesday that one of the worst experiences for a judge or attorney is to discover "the pocketbook is empty" for the victims because the legal fees exhausted the assets and there is no way to recover them.
"I will work to prevent that," he reiterated.
The diocese filed for Chapter 11 bankruptcy in July as it faced more than 60 lawsuits filed by young men who charge they were sexually assaulted as boys by Christian Brothers and other staff at the diocese-run Mount Saint John Academy in Deep River from 1990 to 2002. Mount Saint John was a residential school for troubled boys whose board of directors was headed by retired Bishop of Norwich Daniel Reilly. Since then, additional people whose sexual assault allegations involved not only Mount Saint John but diocesan churches have filed claims in the bankruptcy case.
Victims have until March 15, 2022, to file claims. Those claims are not limited to those who attended Mount Saint John but can be filed by anyone who was sexually assaulted by diocesan priests or other employees. Information on how to file a claim and on the bankruptcy case can be found at bit.ly/ndbclaims or by calling 1 (855) 654-0902.
The bankruptcy process, which freezes lawsuits against the diocese, will determine the assets of the diocese and how much each victim will receive in damages. The 51 parishes in the Roman Catholic Diocese of Norwich are now looking to join the diocese in seeking bankruptcy protection from sexual abuse claims and will have to contribute funds to the settlement. This would leave victims unable to sue the parishes in the future.
Diocese attorney Louis DeLucia told Tancredi on Wednesday that it is difficult to put a value on the amount of the claims being made until after the March 15 deadline. He said the diocese also has to determine the value of the 14 properties it owns, as well as how much the parishes will have to contribute to the victims' fund.
Last month, Tancredi extended the diocese's exclusive right to file a plan until February and has scheduled a Jan. 31 hearing to discuss the progress.
But Stephen Kindseth, one of the attorneys for the victims committee, told Tancredi the committee would have its own proposed plan to file by mid-January. He said the plan would expedite the process and dramatically reduce the legal fees, preserving assets for the victims by turning the "heavy lifting" of the case over to a liquidation trustee.
DeLucia objected to the committee filing a plan and Tancredi urged both sides to build consensus.
Both the diocese and the victims committee have agreed to a plan that would allow the attorneys and financial services firms to be paid 70% of their fees now with the remaining 30% held back until the judge determines what assets are available. In addition, the diocese's attorneys, who earn as much as $835 an hour, and financial experts have discounted their fees 10%. The victims committee attorneys, from the firm of Zeisler and Zeisler of Bridgeport, already discounted their rates 10% and are charging about half the per-hour price of some of the diocese lawyers.
DeLucia said that focusing on fees and fighting over them "is not where the battle should be." Instead, he told Tancredi the battle should be about "more meritorious issues."
At issue is about $1.3 million in fees expended during a period this fall. Overall, the diocese has racked up a projected $2.7 million in legal and financial services expenses relating to the bankruptcy.
Attorneys for the U.S. trustee opposed the procedure of considering the hold-back plan and Tancredi gave them until next week to file their written arguments.