How will filing for bankruptcy affect Child Victims Act lawsuits?

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On Thursday, the Rochester Diocese became the first in New York State to file for Chapter 11 bankruptcy. This comes just one month after the Child Victims Act went into effect, giving victims a one-year window to file lawsuits even past the statute of limitations.

“Upon the filing arises what’s called an automatic stay, so all cases that are proceeding are frozen, they do not proceed any further,” said University at Buffalo Law Professor Todd Brown. “Any new cases cannot be filed, at least not until bankruptcy is over.”

Brown said filing for bankruptcy allows the Diocese of Rochester to reorganize.

“When [the diocese comes] out they could say we’re going to set this amount of money aside, and we’re going to process those claims after the bankruptcy is wrapped up – or they could say anyone who has this type of a claim, this is what you’re entitled to and this is what you’ll receive,” he said. “There are still avenues to protect your interest, even if the diocese tries to come in and force a harsh settlement.

And now that one diocese has filed for bankruptcy, Brown said it wouldn’t be surprising to see others do the same.

In a statement to News 4, a spokesperson with the Diocese of Buffalo said this:

Like every Diocese in the State of New York, the Diocese of Buffalo is consulting financial experts, insurance carriers and working with our Finance Council to review the options available to fairly address the lawsuits filed by survivors and to continue our mission as a Diocese.

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