New York Archdiocese Inks $800 Million Deal With Survivors (1)

The Archdiocese of New York announced an $800 million settlement to resolve about 1,300 child sex abuse lawsuits and avoid bankruptcy.

The proposed agreement with a plaintiffs’ liaison committee, which is made up of eight law firms representing about 70% of claimants suing the church, follows five years of litigation and months of intense negotiations by a mediator, the Manhattan-based Catholic institution said Friday.

Archbishop Ronald Hicks in a statement said the settlement is a necessary step toward healing and reconciliation for a “scarred” church.

“We must also acknowledge that suffering continues for many who continue to live with this trauma each day, and recommit ourselves to ensuring that these horrific misdeeds are never again committed in our Church,” Hicks said.

The agreement is contingent on full agreement by all survivors with pending claims against the archdiocese or its roughly 560 parishes, schools, and Catholic charity affiliates. The archdiocese could still file for Chapter 11 if there are holdouts, according to a settlement document obtained by Bloomberg Law. Claimants would receive the settlement agreement by June 11 and would have until June 26 to opt in.

Jeff Anderson, who represents a group of abuse victims, said in a press release the deal is the “first reckoning” for an institution he characterized as a “deceptive enterprise.” The proposed settlement would be paid into a trust for survivors, with a $615 million payment first and $185 million to be deposited within about 15 months of the agreement, Anderson’s firm said.

Catholic churches and other institutions were hit with a deluge of claims after New York and other states passed laws that let accusers sue over decades-old abuse. Six of the eight Catholic dioceses in New York have filed for Chapter 11 and together have been named in at least 2,800 abuse claims. Half have secured court approval of their bankruptcy plans, agreeing so far to pay at least $1 billion to victims.

“Our clients have carried the weight of this trauma for most of their lives,” said Adam Slater, whose firm Slater Slater Schulman LLP represents 137 of the total claimants. “This settlement cannot undo what was done to them, but it represents a measure of accountability long overdue, and we hope it offers some degree of healing and closure.”

The $800 million could be increased by $15 million based on claims related to New York’s Gender-Motivated Violence Act, and up to $25 million could be reduced from what would be put in the trust to address those same claims, according to the settlement document. Victims may opt for a $250,000 quick payment under the deal, or have a trust-appointed claim reviewer decide their payout based on their individual circumstances.

The deal allows survivors to pursue the archdiocese’s insurance providers, including Chubb Ltd., for more money to be added to the trust. The archdiocese would also have to update a list of clergy credibly accused of abuse as new claims are substantiated and give copies of documents regarding allegations of sexual abuse to a chosen university. About $30 million could be deducted from the distribution to pay for archdiocese insurance counsel and for survivor insurance counsel to pursue other recoveries.

All litigation has been temporarily halted against the archdiocese to give survivors and their attorneys time to review the proposed settlement.

The Archdiocese of New York late last year sought authority from Chubb to discuss settling as many as 1,700 child sex abuse claims for up to $2 billion as part of high-stakes negotiations. The larger dollar amount was pitched to Chubb following a proposal from lead plaintiffs’ counsel representing more than 80% of claimants who sued under the state’s Child Victims Act.

The archdiocese in December told Chubb that a global resolution was achievable at a “substantially lower dollar amount” after the church did its own analysis, according to New York state court records that have since been removed from the court docket.

Chubb sued the archdiocese in 2023, arguing it had no obligation to cover claims because its policies with the archdiocese only covered accidental “occurrences.” The archdiocese, Chubb said, knew about and fostered widespread sexual abuse for nearly a century, prioritizing its reputation and financial survival over child safety, and making the resulting injuries both expected and uninsurable.

The archdiocese has accused Chubb of pursuing a nationwide corporate strategy of “reneging on and avoiding its obligations” to cover abuse claims, despite collecting tens of millions of dollars in premiums.