BUFFALO, N.Y. (WKBW) — The Diocese of Buffalo is asking every parish within its boundaries to file for bankruptcy as part of a revised plan to resolve its long-running bankruptcy case stemming from nearly 900 Child Victims Act claims filed against it six years ago.
The plan calls for each parish to file a rapid prepackaged bankruptcy case immediately before a confirmation hearing on the diocese's reorganization plan. Officials say parishes would only be bankrupt for 48 hours.
WATCH: 'It's a very limited in scope bankruptcy': Buffalo Diocese asks all parishes to file for bankruptcy
Monsignor Robert Zapfel, who sits on the Diocesan Finance Council, said the bankruptcy filing would be narrow in scope.
"The only issue it concerns is issues related to the abuse cases, the Child Victims Act, so it's a very limited in scope bankruptcy," Zapfel said.
Zapfel said the filing would protect parishes against potential child abuse lawsuits without disrupting their day-to-day operations.
"Additionally, it does not affect the overall operations of a parish. Parishes don't have credit ratings. You're not worried about that from a bankruptcy point of view. But let's say the parish has an outstanding bill for $1,000 bucks to Home Depot, Lowe's, or some other vendor. It does not affect those things either," Zapfel said.
For the plan to move forward, every parish pastor and parish trustee must approve it. Zapfel said a single "no" vote would collapse the entire structure.
"So, if one parish votes no, that means that the structure falls. This proposal falls apart for everybody, because the insurance companies will never agree to have that one parish, who could have exposure to one or two, or even no claims, but future claims — they're not going to have that hanging out, aside from their agreement," Zapfel said.
When I asked Zapfel what would happen if the plan failed to receive full approval, he said there is no fallback option.
"So then would it be back to the drawing board, so to speak?" I asked.
"Yes, it would be back to the drawing board, and there's really no plan B from this point," Zapfel said.
Not all parishioners are on board. Craig Speers, with St. Michael’s in downtown Buffalo, expressed concern about the financial consequences for individual parishes.
"It's a damaging effect. It could have a damaging effect on individual credit ratings of each parish," Speers said.
Mary Pruski, with Save Our Buffalo Churches, shared similar concerns.
"The con is — if you don't have suits — what does this mean to your credit rating...all those other things," Pruski said.
Pruski also questioned the legitimacy of the approach.
"It feels like it could be fraud — that you're saying you're bankrupt when you really aren't," Pruski said.
Zapfel pushed back on those concerns, urging parishioners to consider the legal guidance parishes have received.
"You're not just trusting the diocese in something like this, but you're trusting the attorney that the parishes have hired," Zapfel said.
The plan would still require approval from the bankruptcy judge. If approved, Zapfel said the case could be resolved by the end of this year.
The diocese said in a statement that the approach has the support of pastors and has already been used successfully by parishes in the Diocese of Rockville Centre and the Archdiocese of New Orleans.
"We will provide further updates as this process advances, and are heartened at the possibility of at last providing victim-survivors the possibility of closure and healing. With the prospect of finally achieving this goal, we look to the future with renewed commitment and focus on our mission and work in service to the Catholic faithful throughout Western New York and our broader community," the diocese said.
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