Buffalo, N.Y. (WBEN) - The Buffalo Catholic Diocese held a series of Vicariate meetings last week during which details on the Chapter 11 settlement allocation methodology were shared with parish leadership across Western New York.
At those meetings, parish leaders were provided an overview of the $150 million settlement, which has been agreed to in principle by the Creditors’ Committee. Each parish received a detailed statement of their expected contribution to the settlement fund.
Contribution percentages range from 10%-to-80% of each parish’s unrestricted cash and investments with the highest percentage being applied to parishes scheduled to be closed or merged as part of the Road to Renewal program, aimed at better sharing resources and bringing together unsustainable parishes with stronger parish communities.
"This $150 million settlement is an attempt to provide some level of justice and restitution to those victims," said Buffalo Diocese COO Rick Suchan in an interview with WBEN on Wednesday. "The sex abuse crisis, which has justifiably tarnished the Catholic Church and other organizations such as scouting, youth sports, school districts and other religious entities, is especially reprehensible, as we are called to a higher moral authority. It is a terrible, inexcusable and unacceptable chapter in our history, and we, as the Catholic family of Western New York, bear the responsibility for our part in this travesty as church."
Below is the formula used by the Buffalo Diocese to determine parish contributions. The dollar amount represents a parish's unrestricted funds, followed by the percentage of those funds that can be used to pay for the settlement:
- Less than $250,000/10%
- Less than $500,000/25%
- Less than $750,000/45%
- Less than $1,000,000/55%
- More than $1,000,000/65%
- More than $3,000,000/75%
- Merging or closing parishes/80%
"The Diocese itself does not, as validated by court submitted documents and audited financial statements, have the means to single-handedly fund this settlement. We have been clear and have communicated all along that there is necessary involvement on the part of parishes and our affiliates, as they also have claims," Suchan said. "More than 50% of our parishes actually face claims, and individual litigation of a claim could likely bankrupt a parish or one of our affiliated entities."
Suchan adds the funding solution and the settlement contributions the Diocese has been communicating over the course of the past couple of weeks for each parish and affiliated entity is best and most equitably achieved using a portion of each entity's unrestricted assets. Doing so fulfills the meaningful contribution requirement necessary to achieve the desired channeling injunction protection, and address the individual liability exposure that each of those institutions have.
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The Diocesan Internal Audit Department is assisting to ensure the accuracy of the funds that were self-reported by each parish, and used to determine the expected contribution. The contribution is based upon a progressive percentage applied to the parishes’ self-reported and unrestricted cash and investments held as of Aug. 31, 2024, the end of the Diocesan fiscal year.
Unrestricted cash and investments exclude any prepaid tuition held, Mass offerings and donor-restricted gifts.
"We looked at various funding methodologies, and when I say we, it was a broad group of individuals who provided input and analysis relative to the information that was disseminated in our barcariots last week. It's important to note that every diocese that has gone through the bankruptcy process has had to come up with am allocation strategy, which has included the parishes," Suchan added. "We've been very transparent to parishes, again, all along, and have repeatedly suggested through their representatives, who have communicated this, that roughly 65% of their assets would likely be utilized in an eventual settlement. The only way again forward is through this collective Catholic contribution based on unrestricted assets."
Suchan adds the Diocese will be contributing as well from unrestricted cash reserves, which are de minimis, especially after the expenses that have been incurred over the last five-and-a-half years during the Chapter 11 process.
"This has been very publicly announced, we're selling nearly every piece of real estate that the Diocese owns, other than St. Joseph's cathedral, and we're using those real estate proceeds as part of the diocesan contribution. The Diocese's contribution will really, at the end of the day, absorb 85% of its available resources," he said.
In addition to their contributions and those from the parishes, Suchan adds the last remaining portion of the settlement contribution is expected to come from affiliates, who also have claims.
St. Joseph Foundation president and canon lawyer Philip Gray told WBEN this week he does not believe the Diocese's rationale or methodology reflects the obligations that the bishop has to the people of his diocese, thus making the methodologies a violation of canon law.
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Suchan believes Gray may not be focused on the right canon when it comes to the Diocese's methodology.
"We, too, have investigated this extensively with our canon lawyers, and believe fully that this contribution formula is appropriate within the confines of the parish and the parish legal structure, and are pursuing that contribution methodology accordingly," he said.
Meanwhile, local parishioners from churches on the closing or merger list have voiced their frustrations with WBEN, viewing this as an attack on their ability to stay open going forward. Suchan points to the recommendation for their closure not being a Chapter 11 recommendation, rather it being part of the Road to Renewal process announced months ago.
"The contribution expectation from those closed parishes recognizes that those parishes will still have 20% of their resources left in order to make ongoing obligations, commitments and bills associated with operating their facility, plus they still have ongoing Sunday or weekend offertory in order to contribute towards their cash flow needs," Suchan noted.
Parishioners are also frustrated by, what they feel, as some parishes in Western New York receiving payout rates that are not fairly comparable to some other parishes under the Buffalo Diocese.
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"We designed this, and it's very consistent with what many other diocese have done throughout the country, where the various tiers are based on the level of cash for each of the organizations, and we look at their ability to continue moving forward," said Al Gress, CFO of the Buffalo Diocese on Wednesday. "Obviously, parishes with lower amounts of cash more, if you will, akin to a break even, they would see a much less percentage of allocation. The bankruptcy attorneys have said it's still a meaningful contribution for that level and so on and so forth. So the more cash with a view of the remaining cash and the ability for the parish to continue has been considered. So we think it's a very balanced, very equitable, and is very consistent with what is being done throughout the country in similar situations."
In our conversation with Gray on Tuesday, he also said given his belief that the Diocese breached canon law with the rationale of their settlement rates, he's encouraging pastors of parishes to not pay whatever they have been tabbed with. It is also something that parishes have discussed as an option they want to consider.
Gress says, though, the contribution is part of the obligation of the Catholic family settlement.
"Every single parish is a civil corporation as part of this Catholic family settlement. They will get released from claims through the effective date, and any subsequent that may arise if the window is opened again. That's a crucial part of all of this," he said. "And we suggest to all the parishes, as we are doing, that they have some excellent attorneys that have been retained strictly on behalf of the parishes, looking at it purely from their viewpoint. They need to refer to those attorneys who are actively engaging these parishes and get the proper advice. We can't speak to the veracity of the canon lawyer running around, but we suggest that they have counsel already retained, already being paid for, and that they refer those questions to them."
There have been parishioners who have questioned where some of the Diocese's reserve money is being held. Does the Diocese not have the funds to pay the settlement?
"The Diocese has the money in reserve, plus with diocesan real estate sales to pay its portion of the structured settlement that we proposed to court. That has been questioned by the judge presiding over the case, we have demonstrated to him that if we could not be good for that money, we would not have agreed to the $150 million settlement," Suchan said.
Gress also reiterates how this is not a diocesan obligation only.
"The many cases that have been raised all mention various parish corporations, so this is not just a diocesan solution, if you will. This is a Catholic family settlement, and the obligation is to be shared with all members of the Catholic family organization."
So how could this settlement potentially impact the budgets and health of Catholic schools in the area? Suchan says the Diocese has been very engaged with a Catholic school strategic plan over the past 18 months.
"In that process, we have been very much encouraging the Catholic schools, which are directly affiliated with the parish, known as parochial schools, that they need to be cognizant of the fact that this settlement could compromise a parish subsidy to their operating budget, and that they needed to really increase their fundraising in order to potentially offset," he explained. "They needed to take a strategic focus on enrollment, enrollment management and increasing enrollment to building capacity levels. And also consider if their tuition is really reflective of their cost of operation and the cost of delivering an excellent education."
Suchan adds it is the Diocese's intention and Bishop Michael Fisher's commitment that Catholic education remains a priority within the Diocese of Buffalo, and it's available to all who want it.
As the Buffalo Diocese moves forward with it's clergy abuse settlement, Suchan asks the Western New York Catholic community to remain hopeful.
"The Catholic Church will survive, it has evolved and survived for more than 2,000 years. This settlement gives us the ability to close, at least from the church's perspective, this chapter, although we realize that the harm that was caused to victims is never erased. And it is something that we will continue to do what we can to help them," Suchan said. "But we will move forward. We hope we will be stronger as we move forward, and we would hope and expect and pray that the faithful remain with us."
Bishop Fisher was out of town and not available for comment.