Rochester Diocese Claims Fund Reaches $126M as 2 More Insurers Settle, 1 Holds Out

By Andrew G. Simpson | July 28, 2023

The Catholic Diocese of Rochester and sexual abuse survivors have reached settlements with additional insurers on amounts available to cover abuse claims, bringing the total fund now available to survivor claimants to $126.35 million.

The latest settlements are with insurers Interstate for $50 million and First State for $750,000, totaling $50.75 million.

London Market Insurers (LMI) and LMI Underwriters previously agreed to contribute $20.6 million and the diocese itself is contributing $55 million to the trust fund for claims as part of its Chapter 11 reorganization plan.

The diocese has not been able to reach a settlement with another insurer, Continental Insurance Co. (CNA). Continental offered to contribute a $63.5 million but that was rejected. The diocese and the creditors committee believe Continental has the most exposure of any insurer.

The reorganization plan as it currently stands retains the ability of claimants to litigate against Continental as the remaining non-settling insurer.

In exchange for its settlement payment, the diocese will receive a discharge in bankruptcy and be released of all liabilities for the sexual abuse claims

The diocese declared bankruptcy in 2019 after hundreds of lawsuits were filed against it under the state’s Child Victims Act. Almost 500 sexual abuse claims have been filed. The claims relate to instances of abuse that occurred many years ago, some of them and decades ago.

Continental has said it believes that the $63.5 million settlement amount is reasonable given all of the circumstances and because it believes many claims under its policy do not involve facts sufficient to impose liability upon the diocese, are subject to complete coverage defenses, or would have only limited coverage available once the limits of liability are applied.

In a letter to the bankruptcy court, the insurer noted that it subsequently offered additional sums, but that offer was also rejected. The insurer told the court it now feels “there is no reasonable amount it could offer” that the parties would be willing to accept.

Give the stalemate, Continental told the court it will file its own plan of reorganization for the diocese, a plan that will incorporate all of the funding now committed from the diocese and other insurers along with guaranteed additional funding from Continental that will exceed the $63.5 million amount. The insurer said survivors will then be able to choose its plan with a guaranteed sum and no need for further litigation or the diocese plan with a smaller guaranteed amount that leaves the door open to years of litigation.

The diocese and creditors committee said they will file an amended plan reflecting the new settlements with the court on or before September 13.

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