Diocese of Norwich committee asks court to terminate exclusivity

By Sarah Lizee

Olympia, Wash., Feb. 6 – The official committee of creditors of Norwich Roman Catholic Diocesan Corp., known as the Roman Catholic Diocese of Norwich, asked the U.S. Bankruptcy Court for the District of Connecticut to terminate the diocese’s exclusive period to solicit votes on a Chapter 11 plan, according to a motion filed Feb. 3.

The court has granted six exclusivity extensions to the diocese so far. Its exclusive solicitation period is set to expire on March 16.

The diocese filed a Chapter 11 plan on Jan. 17, the last day of its exclusive period to file a plan.

The committee said the plan isn’t consensual and negotiations towards a global resolution are at an impasse.

The proposed plan would create a fund of about $29 million, which net of expenses would result in an average distribution of just over $200,000 to 142 victims of abuse.

The plan also proposes that some parties, including insurer Catholic Mutual and the diocesan parishes, would receive broad releases from third-party claims.

“The distributions proposed in the proposed plan are far short of what is necessary to even remotely adequately compensate victims of sexual abuse – the distributions being proposed are a relatively small fraction of what individual claimants receive as judgments on account of abuse of the type suffered here,” the committee said in the motion.

The committee said the debtor and other parties have assets that are available to pay victims, but they are unwilling to part with those assets.

“Rather than seek maximum compensation for victims of sexual abuse, the debtor at this point is using this case to protect Catholic Mutual and the diocesan parishes,” the committee said.

The committee has also filed an objection to the diocese’s motion seeking to extend mediation through confirmation of the plan.

“The mediation failed and there is no reasonable expectation that the significant remaining disputes can be resolved through mediation,” the committee said.

“The mediation parties are at an impasse. As a result, the mediation has become subject to the law of (severe) diminishing returns: the more time, energy, and resources that are directed to mediation the less net value it provides.”

The Norwich, Conn.-based diocese filed bankruptcy on July 15, 2021 under Chapter 11 case number 21-20687.

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