Albany Diocese files for bankruptcy as hundreds of sex abuse suits pile up

The Roman Catholic Diocese in Albany has reportedly filed for Chapter 11 bankruptcy to contend with the financial fallout of hundreds of child sexual abuse lawsuits it faces.

“The decision to file was not arrived at easily and I know it may cause pain and suffering, but we, as a Church, can get through this and grow stronger together,” Bishop Edward Scharfenberger announced Wednesday, according to a Times Union report.

The Albany Diocese is the fifth of eight in the Empire State to declare bankruptcy in the wake of a flood of cases filed between 2019 and 2021 during the Child Victims Act window allowing survivors to sue regardless of whether the claims were outside of the statute of limitations.

The bankruptcy move comes after months of negotiations between the church and plaintiffs – whose cases allege the diocese allowed the abuse to occur and then covered it up.

Bishop Edward Scharfenberger announced Wednesday the Albany Diocese filed for bankruptcy.

Some of the abuse victims said previous global settlement offers by the diocese were insufficient, and claimed the church continued to block efforts to get information in their cases, the outlet reported.

“It had come to the point where actually our financials were showing that we were going to have a shortfall in our ability to maintain our pension (fund) and also to pay our employees,” Scharfengerger said. “It was now or never, basically.”

Scharfenberger said he believed a global settlement with all of the plaintiffs would have allowed for the most fair outcome, and said the church’s self-insurance funds had been “depleted” after settlements were paid out in dozens of individual cases.

Bishop Edward Scharfenberger is pictured.
The cleric said the church’s self-insurance funds were nearly depleted after paying out dozens of individual settlements.
AFP via Getty Images

“We don’t have the resources to settle any more,” the cleric said.

Scharfenberger said bankruptcy would ensure all the plaintiffs with open cases would receive compensation.

The bankruptcy case will pause pending lawsuits so the diocese can reorganize and determine the value of its assets.

Bishop Edward Scharfenberger is pictured alongside Archbishop of New York, Cardinal Timothy Dolan.
Lawyers for victims with pending sex abuse cases claim bankruptcy is a legal move with the diocese claiming it has far less assets than in actuality.

A group of lawyers representing 190 of the victims in cases against the Albany Diocese have accused the church of understating their assets and filing for Chapter 11 bankruptcy as a legal tactic.

The lawyers believe the diocese is worth $600 million, while in the bankruptcy case it claims to only have assets worth between $10 and $50 million, according to the report.

“The Diocese of Albany’s decision to declare bankruptcy is another calculated self-effacement in a long history of cowardice,” victim lawyer Cynthia LaFave said in a statement. “The Diocese’s role in shrouding — perpetuating — abuse has always taken agency from survivors. Here again, the diocese is attempting to silence and suppress the very people they purport to protect.”

With Post Wires