Buffalo Diocese Seeks Reversal of ‘Opt-Out’ Liability Ruling

The Diocese of Buffalo and a group of sex abuse claimants urged a court to reconsider its ruling that the Catholic group’s bankruptcy plan can’t force voting creditors to surrender their right to sue church affiliates without express consent.

Requiring creditors to affirmatively opt in to third party liability releases is impractical and potentially fatal to a settlement meant to pave the way for the institution to exit bankruptcy after more than six years, the diocese and a committee of unsecured creditors said in March 13 filings in the US Bankruptcy Court for the Western District of New York.

A ...