NORWICH DIOCESE FILES CHAPTER 11 TO ENSURE FAIRNESS AND EQUITY FOR ABUSE SURVIVORS, MANAGE LITIGATION EXPENSES & CONTINUE ESSENTIAL MINISTRIES
For more information, contact Jamie Moss, newsPRos, 201-493-1027, [email protected]
July 15, 2021, Norwich, CT – The Roman Catholic Diocese of Norwich today filed for reorganization under Chapter 11 of the federal Bankruptcy Code. Bankruptcy proceedings will be before Judge James J. Tancredi in the U.S. Bankruptcy Court for the District of Connecticut in Hartford.
In a letter from the Most Reverend Michael R. Cote, D.D., Bishop of Norwich which was posted to the Diocese’s website, Chapter 11 is described as the most equitable way to resolve numerous pending lawsuits alleging the abuse of students at Mount Saint John School filed against the Diocese and a former bishop and certain other creditors’ claims. Nearly 60 former residents have filed suit for damages that exceed the Diocese’s current financial ability to pay.
“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,” Bishop Cote said. “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.”
The Diocese’s parishes, cemetery corporations, Catholic schools and religious orders are not included in the Diocese’s bankruptcy and the Chapter 11 filing is not expected to have a direct impact on their day-to-day operations or the continued employment, salaries, and benefits of the Diocese’s employees or retirees.
Today’s filing puts all civil actions, judgments, collection activities and related legal actions against the Diocese on hold. During this period, the Bankruptcy Court will set a deadline by which individuals and organizations are required to file financial claims against the Diocese. The full extent of the Diocese’s liabilities will not be known until after the claim deadline has passed.
The Diocese will negotiate in good faith to reach settlements with abuse survivors and the approved creditors, and will prepare a financial reorganization plan, including all obligations, who will be paid, in what amounts and how and when the Diocese will emerge from bankruptcy. Under Chapter 11, reorganization plans must be submitted to the Bankruptcy Court and all creditors – including, in this case, the individuals who have filed abuse claims – will vote to approve any distributions before they are implemented.
“The Diocese is dedicated to working diligently with abuse survivors, creditors and its ministries to maintain open communication and full transparency as we work toward a comprehensive resolution of all claims and a more secure financial future under Bankruptcy Court protection,” Bishop Cote said. “We look forward to emerging from the reorganization process as a stronger diocese committed to demonstrating Christ’s spirit of humility, charity, compassion, sensitivity and courage in our ministries.”
The Diocese of Norwich is the 31st and most recent Catholic religious organization in the U.S. to seek bankruptcy protection under Chapter 11. Three of these bankruptcies were filed by religious orders, 28, by dioceses or archdioceses. As of May 2021, 19 of the earliest bankruptcies have concluded with a successful reorganization and 11 of the more recently filed reorganizations are pending. The archdioceses, dioceses and religious orders whose bankruptcies have concluded generally report the Chapter 11 process was instrumental to their financial recovery and current organizational stability.
About the Diocese of Norwich
The Roman Catholic Diocese of Norwich was established in August 1953. It comprises all of the counties of Middlesex, New London, Tolland and Windham in Connecticut and Fishers Island, within Suffolk County, New York. The fifth Bishop of Norwich, the Most Reverend Michael R. Cote, D.D., was ordained June 29, 1975; appointed Titular Bishop of Cebarades and Auxiliary Bishop of Portland May 9, 1995; consecrated July 27, 1995; appointed Bishop of Norwich March 11, 2003; and installed as Bishop of Norwich on May 14, 2003.
Comprehensive information about the Diocese’s Chapter 11 Bankruptcy is available online at https://www.norwichdiocese.org/