Diocese hopes bankruptcy will allow "refocus" of mission

Scharfenberger: "Going forward we will see a lot of action that will result in very fair resolutions as much as we can"

Mike Baggerman
February 28, 2020 - 3:49 pm
Bishop Edward Scharfenberger

Edward Scharfenberger speaks to reports shortly after the Diocese of Buffalo officially files for bankruptcy. February 28, 2020 (AP Photo)

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BUFFALO, N.Y. (WBEN) - Diocese of Buffalo Apostolic Administrator Edward Scharfenberger said he hopes that bankruptcy will provide the diocese an opportunity to refocus and improve on their mission.

The long-expected bankruptcy filing was made official on Friday in US Federal Bankruptcy Court.

"I'm careful not to use the word bankruptcy even though we are in a bankruptcy court because a lot of people are under the impression maybe that the diocese is out of money and we can't meet our obligations to our employees," Scharfenberger said. "That's not true. We wanted to do it in a way that is fair and open."

Scharfenberger said the bankruptcy applies only to the Diocese of Buffalo organization and will not impact parishes or Catholic Charities.

"My hope is that going forward, regardless of the mistakes we've made, regardless of the suspicions that may have been rightfully raised about the way things have been done, that going forward we will see a lot of action that will result in very fair resolutions as much as we can," Scharfenberger said.

The Diocese of Buffalo encompasses 163 parishes across eight counties. The church has lost nearly $7 million over the last two years due to the ongoing clergy sexual abuse scandal. More than $18 million total was paid to the more than 100 victims under their independent compensation program.

The Catholic Church in Buffalo is still facing hundreds more lawsuits under the Child Victim's Act. Those lawsuits are now under a stay in the courts.

While Scharfenberger said he hopes that this process will help the healing process for victims of abuse and that he hopes victims know they are an essential part of the church family, he also said priests who were accused of abuse are part of their family and acknowledged that he has to take care of them in some way, even if they are disciplined.

Scharfenberger apologized again for the gathering of priests on Monday that included some who had credible accusations and others who were placed on leave due to accusations of abuse.

"The purpose was to gather the priests together, all of them, even the bad ones or the ones under suspicion, and to be able to give them information that everybody really needs going forward because we knew were were going to make this filing on Friday," Scharfenberger said. "...I want to keep a strong supervision of all of the priests, particularly those with challenges. I don't exclude them. This was a gathering of priests and it was carefully planned as a private gathering...I did not want to trigger any of the victims who might see something like this and be hurt by it as some were."

The bankruptcy only applies to the diocese as a corporation. Scharfenberger said a parish would have to file its own bankruptcy because they are separate corporations and has their own protections and trustees.

"They're not involved in this particular proceeding," he said. "My message to the parish would be to stay calm. There is not going to be any upsetment (sic). If anything...the services we deliver to parishes should be better or more improved because that is the whole reason why diocesan offices exist. It's to serve and support the parishes."

Parish collections go towards the specific corporations of the parish and not to the Diocese of Buffalo.

The Chapter 11 filing estimates between $10 million and $50 million in assets and between $50 million and $100 million in liabilities. The number of creditors is estimated at between 200 and 999.

The diocese already has paid out about $18 million — including $1.5 million from the sale of the bishop’s mansion — to more than 100 victims under an independent compensation program established in 2018. It faces more than 250 new lawsuits filed since August, when the New York’s Child Victims Act suspended the statute of limitations to give victims of childhood abuse one year to pursue even decades-old allegations. The number of suits is expected to grow to more than 400, financial director Charles Mendolera said in a court filing.

The diocese reported a $5 million loss in 2019.

The bankruptcy filing does not include individual parishes or Catholic elementary and high schools, which are separately incorporated, Scharfenberger said.

Movement to Restore Trust released the following statement:

"When the magnitude of victims claims against the Diocese of Buffalo under the Child Victims Act became clear several months ago, the Movement to Restore Trust concluded that a bankruptcy filing by the diocese was inevitable," said John J. Hurley, Movement to Restore Trust Organizing Committee Member.  

"Resolving the claims of victims of sex abuse under the supervision of a federal bankruptcy judge is the only way to insure the prompt, fair and equitable treatment of claimants.  The bankruptcy court will provide a forum in which the legitimate interest of victims in openness and transparency can at last be assured.  We think that it will provide the essential starting point for the reconciliation, healing, and ultimately, reform of the Catholic Church in Buffalo that so many desire."   

Society of St. Vincent de Paul released the following statement

In the wake of today’s announcement that the Diocese of Buffalo has filed for reorganization under chapter 11 of the United States Bankruptcy Code, it is important to note that the Society of St. Vincent de Paul has no corporate connection with the Diocese of Buffalo, and never has.

In conjunction with our international bylaws, all financial contributions to the society remain with the society and are used to further our mission. Not a single penny of donations generously made to the society will be given to the diocese to help pay for any legal claims.

Since the Society’s formation in 1847, we have always been and remain independent. And we remain true to our mission: we are a Catholic lay organization whose members seek to grow spiritually by offering person-to-person assistance to the poor, the suffering, and the forgotten in the compassionate tradition of the Society’s founder, Blessed Frederic Ozanam, and its patron, St. Vincent de Paul. 

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