The Diocese of Norwich has filed for bankruptcy, saying it was unable to pay damages for over 60 claims of abuse alleged to have taken place at the Mount Saint John School, a former residential school in Deep River.
The Diocese announced Thursday that it would be filing under Chapter 11, a provision under the U.S. bankruptcy code that allows businesses to “restructure” their debts in order to pay their creditors. Bishop Michael R. Cote, the head of the diocese, said that filing a Chapter 11 was “the most equitable way” to address the lawsuits.
Cote said that the decision to file for bankruptcy was a difficult one that he made “after two years of careful deliberation and prayer.”
“Over the past two years, our financial and legal advisors have studied our situation and concluded that a Chapter 11 filing was the only way to ensure an equitable settlement for abuse survivors, help us manage litigation expenses, and carry out our essential mission and ministries,” Cote wrote in a letter to the Diocese.
The Mount Saint John School was previously a residential boarding school for youth referred by the Department of Children and Families and the juvenile courts. In 2018, twenty-four men who were former students at the academy filed a lawsuit against the dioceses saying that they were sexually assaulted between 1986 and 1996, when they were between 11 and 15 years old.
In February of 2019, the diocese identified 43 priests who had an “allegation of substance” made against them regarding the sexual abuse of a minor. The diocese also settled nine abuse claims for a total of approximately $7.7 million.
Cote announced in a letter in November that he had asked Connecticut Superior Court Judge Michael E. Riley to take charge of a Clerical Sexual Abuse Accountability Investigation for the diocese. The results of the investigation will be made public once the investigation is complete.
Norwich is the 31st Catholic religious entity in the United States to file for Chapter 11 bankruptcy.
The diocese will have to submit a financial reorganization plan to the court, and any distribution of funds will have to be approved by the individuals who have filed abuse claims.
“The bankruptcy court will oversee a settlement that ensures that all survivors are included and treated fairly,” said Cote, adding that “fair and equitable treatment for survivors of sexual abuse has always been, and continues to be, a top priority for the diocese.”
The bankruptcy filing will not affect the diocese’s ability to pay its employees their salaries and benefits.
Cote said that they would continue to operate their ministries, such as Catholic Charities and the St. Vincent De Paul food pantries and soup kitchens. The parishes, schools and cemeteries are separate legal entities and will not be included in the bankruptcy filing.
The diocese claims to have between $10 and $50 million in assets, while its liabilities are between $50 and $100 million, according to the bankruptcy filing.
Cote said that the Diocese’s financial and legal advisors were “maximizing the availability of insurance coverage, real estate assets, and investment proceeds,” in order to pay the settlement. Parishioner’s weekly and monthly donations to their churches will not go toward paying for the lawsuit and will remain in individual parishes.
Publicly available information about the bankruptcy and reorganization will be available at www.norwichdiocese.org