Buffalo Diocese Relies on Insurance Policies to Cover Abuse Claims in Bankruptcy

The Buffalo (N.Y.) Diocese’s lists of assets and liabilities filed with the U.S. Bankruptcy Court identifies multiple investment funds and bank accounts holding in excess of $28 million, dozens of properties and a fleet of vehicles. What the schedule doesn’t mention is insurance coverage, which has played a huge role in the resolutions of other chapter 11 reorganizations by dioceses and archdioceses facing child sex abuse lawsuits, the Buffalo News reported. Eight insurance companies, for example, agreed in 2018 to pay $137 million toward a $210 million fund to settle abuse claims in the Archdiocese of St. Paul & Minneapolis. Of the nearly $800 million in bankruptcy settlements reached by 15 Catholic dioceses, archdioceses and religious orders since 2004, more than half of the funds have come from insurers, according to research by Pennsylvania State University law professor Marie T. Reilly. Buffalo Diocese lawyers are now counting on the yet-to-be quantified insurance coverage as they try to resolve the claims of more than 250 people who allege they were abused as children by priests or other employees. “Insurance is without question in this case our largest and most important asset,” Buffalo Diocese bankruptcy attorney Stephen Donato said during a hearing last week with Chief Judge Carl L. Bucki of the U.S. Bankruptcy Court in the Western District of New York.