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Catholic Diocese of Buffalo: Chapter 11 is imminent

The financial report by the Central Administrative Offices of the Diocese was posted in the February edition of the WNY Catholic newsletter.

BUFFALO, N.Y. — The Catholic Diocese of Buffalo says Chapter 11 bankruptcy is imminent following the dozens of claims and lawsuits filed against the diocese over alleged sex abuse by members of the clergy.

The financial report by the Central Administrative Offices of the Diocese was posted in the February edition of the Western New York Catholic newsletter. 

"In response to the magnitude of the number of claims, lawsuits, and alleged damages, the CAO has determined that a filing of a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code is imminent."

The newly released financial report from the Central Administrative Offices of the Diocese shows the diocese has less than two-thirds of the cash-on-hand it had in 2018 and says there are significant financial challenges.

Those concerns come as the diocese faces lawsuits filed under the Child Victims Act.

The diocese reports a roughly $5 million net loss in assets from 2018 to 2019. It also shows a $1.5 million drop in donations to the Fund for the Faith.

A spokesperson for the diocese on Thursday told 2 On Your Side's Kelly Dudzik, "There is nothing new here. Bishop Scharfenberger ... has already indicated the Diocese is considering a Chapter 11 reorganization and, in all likelihood, will go down that route."

That is what Bishop Scharfenberger told our Steve Brown earlier this month.

"I think it is soon. I think within weeks, not months," Scharfenberger said. "I think the positive benefits would probably outweigh the negatives, and given the real challenges that the diocese is facing financially, it seems all but inevitable."

The reasons? Thursday, the spokesperson for the diocese said they "would include the fair and just restitution for victim survivors, versus a litigation approach that would favor those first in line (with initial costly settlements depleting the Diocese's resources)." 

The report also reiterated net proceeds from the sale of the Bishop's Residence, which sold last year for $1.5 million, will be used for future child sexual abuse claims.

BUFFALO, N.Y. - The Oakland Place residence belonging to the Buffalo Catholic Diocese has been sold for $1.5 million. RELATED: Bishop Malone's Buffalo home under contract The home was purchased by Carmel Oaks, LLC.

The financial report is part of the Western New York Catholic publication. On the second-to-last page, there's a list of resources for sex abuse survivors and information about a class Parish and Catholic school employees and volunteers who work with children are required to take addressing child sexual abuse awareness.

More than 200 Child Victims Act lawsuits have been filed against the Catholic Diocese of Buffalo after New York State began accepting cases once blocked by the statute of limitations.

Bishop Richard Malone resigned this past December following criticism of his handling of the sex abuse allegation cases. Albany Bishop Edward Scharfenberger now runs the diocese as the apostolic administrator.

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