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New York diocese moves to dismiss bankruptcy, in impasse with creditors

May 03, 2024

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CWN Editor's Note: The Diocese of Rockville Center, New York, has asked a bankruptcy court to dismiss its bankruptcy case, after sex-abuse claimants rejected a settlement plan.

The move by the diocese—unprecedented in the many cases of diocesan bankruptcies in the US—suggests that a dramatic showdown is coming in the case. Attorneys for sex-abuse claimants are currently demanding more than twice the sum proposed in the last reorganization plan submitted by the diocese.

Plaintiffs voted in February to reject a proposed $200-million settlement, which diocesan officials described as “the highest offer in the history of diocesan bankruptcies.” The diocese now argues that the creditors are “demanding an unrealistic amount of money,” and asking the court to dismiss the case.

The diocese, which now faces more than 500 sex-abuse suits, filed for bankruptcy protection in October 2022. The contentious process has already cost about $100 million in legal fees.

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