Rockville diocese’s creditors committee fights to keep case open

By Sarah Lizee

Olympia, Wash., April 26 – The Roman Catholic Diocese of Rockville Centre, New York’s motion for dismissal of its Chapter 11 bankruptcy case drew an objection from the official committee of unsecured creditors, according to documents filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the diocese filed the motion for dismissal after its Chapter 11 plan of reorganization was rejected by a super-majority of abuse survivor claimants.

The committee consists of nine members that hold abuse claims against the diocese.

“Dismissal at this juncture would substantially increase the continuing depletion of the estate,” the committee said in the objection.

“And now, unlike one year ago, there is a realistic prospect of rehabilitation and consensual resolution of this case.”

The committee called the motion to dismiss the diocese’s attempt to avoid its “day of reckoning” in state court.

The group said that instead of dismissal, the court should maintain the case as a vehicle for effectuating a settlement that will result from state court actions establishing the liability for the abuse claims.

“The committee has no doubt that the diocese will use dismissal to try and delay the trial cases,” the committee said.

“And, once that and other delay tactics in state court are exhausted, the diocese, as it has promised, will file for bankruptcy again.”

The Rockville Centre, N.Y.-based diocese filed bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Oct. 1, 2020 under Chapter 11 case number 20-12345.

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