Long Island Diocese’s Restructuring Plan Prompts DOJ Objection

A bankrupt Long Island-based Catholic diocese is attempting to improperly release third parties from child sex abuse claims in violation of a US Supreme Court decision, the Department of Justice’s bankruptcy watchdog said.

The Roman Catholic Diocese of Rockville Centre’s proposed reorganization plan contains “coercive” litigation releases that conflict with the high court’s findings in its Purdue Pharma LP decision, which rejected liability shields for nonbankrupt entities without creditor consent, the US Trustee said Tuesday in an objection.

While the diocese’s plan requires abuse claimants to sign a release to receive payment, “it does not make the release ‘consensual’ ...