Diocese of Norwich gets shorter-than-requested exclusivity extension

By Sarah Lizee

Olympia, Wash., Nov. 12 – Norwich Roman Catholic Diocesan Corp., known as the Roman Catholic Diocese of Norwich, secured a 120-day extension of its exclusive periods to file and solicit votes on a Chapter 11 plan, according to a motion filed Monday with the U.S. Bankruptcy Court for the District of Connecticut.

Specifically, the court extended the plan filing period through Feb. 4 from Nov. 12 and the solicitation period through April 5 from Jan. 11.

Each of the extensions are shorter than the diocese’s request, which was for the plan filing period to be extended through March 12 and the solicitation period through May 11, 2022.

As previously reported, the official committee of unsecured creditors had objected to the extension motion, saying it should be denied because the diocese has “grossly mismanaged, or simply failed to manage” its bankruptcy estate and bankruptcy case.

In an opinion filed Wednesday, the court said that while it “shares the trepidation about the magnitude of all legal fees” that may be incurred in the case, the termination of the debtor’s exclusivity at this point would not likely achieve a reduction of those legal fees, but more likely would assure enhanced and contentious litigation and the filing of contested competing Chapter 11 plans.

“The fueling of hostilities between major constituents, the initiation of broader litigation and the balkanization of interests occasioned by a premature termination of exclusivity will likely afford the survivors the least solace and timely recoveries on their claims,” the court said in the opinion.

The court said it is urging the debtor, its major constituents and the committee to constructively engage in good faith plan negotiations during the exclusivity extension.

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

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