Bankruptcy Judge Paul Warren has declined to kill a $63.5 million deal between Continental Insurance Co. and the Roman Catholic Diocese of Rochester in the diocese’s bankruptcy. Warren’s decision came after he called off a Dec. 8 hearing in which the insurer and the official committee of unsecured creditors were expected to present oral arguments, the Rochester Diocese reported. Judge Warren’s decision, handed down later the same day, leaves questions to be settled: whether either or both rival plans of reorganization presented by Continental and the diocese can be put up to a vote by creditors, and whether Continental can collect damages from the diocese for expenses the insurer says it bore after the diocese pulled out of the 2022 settlement agreement. Approval of the reorganization plan by creditors and the court is needed before payments can be made to the 485 survivors of sexual abuse at the hands of priests and other church functionaries seeking compensation from the diocese. Before calling off the Dec. 8 hearing, Judge Warren, hoping to avoid protracted litigation in the already drawn-out bankruptcy, had invited the parties to work out a global settlement. In his decision, the judge called his failed attempt to cut short the contentious proceedings “a perhaps naïve but well-intended effort.”
