The Archdiocese of New York is reportedly in danger of bankruptcy unless it raises hundreds of millions of dollars to pay off roughly 1,700 people who allege priests and lay staff members sexually abused them as minors.
Catholic parish pastors for the nation’s second-largest diocese were told during an April 17 emergency meeting at St. Joseph College and Seminary in Yonkers that despite cost-cutting that includes $8 million in real estate selloffs in the past two years, a $300 million fund to pay off the victims is still well short of what’s needed to reach a global settlement, Our Town reported.
The pastors were told they’d instead have to have to dip into their own parish coffers to collectively raise up to $400 million, or the archdiocese – which represents 2.8 million Catholics in Manhattan, The Bronx, Staten Island and seven Hudson Valley counties—would be forced into bankruptcy.
“That is the nuclear option,” said one pastor. “It would be a disaster for the archdiocese.”
The real estate sales have included selling its 20-story headquarters, the Terence Cardinal Cooke Center, on Manhattan’s First Avenue for $103 million to a developer in July who plans to add six stories and convert it into high-rise housing.
Individual costs could range from high six figures to several million dollars per parish. Some Catholic schools with independent foundations could be hard hit by the new levy, said a source.
“They will try to look at the books of each parish,” said the source. “It will be a case of ‘let us see how much you have in the bank, and we’ll tell you how much you have to pay.’”
“It is not going to be totally democratic,” a pastor added.
Archbishop Ronald Hicks, who two months ago replaced the archdiocese’s longtime former leader Cardinal Timothy Dolan, was not at the emergency meeting. It was instead overseen Bishop Edmund Whalen, who was appointed vicar general of the archdiocese by Hicks earlier this month.
Late last year, the archdiocese sought authority from its insurer, Chubb Ltd., to discuss settling the claims for up to $2 billion as part of the high-stakes negotiations, Bloomberg News reported citing Manhattan Supreme Court filings on Tuesday.
The archdiocese pitched the figure to the insurer following a proposal from the lead plaintiffs’ lawyer, who represents more than 80% of claimants.
The archdiocese did not consider the settlement demand made by the claimant lawyers in November reasonable, its attorney Jim Murray said in a Dec. 1 email. But Murray told a Chubb lawyer that a global resolution was achievable at a “substantially lower dollar amount” after church leaders conducted their own analysis.
The claimants’ proposal wasn’t disclosed in court documents.
The archdiocese is still involved in a related legal battle with Chubb, which maintains it shouldn’t have to pay off the sex abuse claims because it alleges the archdiocese knew of the widespread abuse for years and covered up the crimes.
The Archdiocese did not return messages.
In October 2024, the Archdiocese of Los Angeles — the nation’s largest diocese — reached a landmark $880 million settlement to resolve more than 1,300 claims of childhood sexual abuse.
