Long Island Diocese Bankruptcy Exit Is Rare Success Amid Delays

When a Long Island-based Catholic diocese’s restructuring plan was approved by a court, it became only the fifth religious organization—out of nearly two dozen—in five years to reach a deal to end its bankruptcy.

Diocese bankruptcies are spurred by litigation alleging decades-old child sex abuse by clergy members. The Chapter 11 cases are often drawn out amid negotiations with abuse claimants and frustrated insurers over compensation and abuse-preventing protocols. In June, the US Supreme Court introduced another factor with its Harrington v. Purdue Pharma LP decision barring litigation shields for people and entities with ties to a bankrupt company without ...