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The Roman Catholic Diocese of Syracuse has secured final approval for its $176 million Chapter 11 plan, bringing a pivotal resolution to years of legal battles over sexual abuse claims. U.S. Bankruptcy Judge Wendy A. Kinsella granted confirmation on Wednesday, overruling objections from federal watchdogs and concluding that recent insurance settlements did not upend the fundamental deal offered to survivors.

“They get paid in exchange for the release of claims,” Judge Kinsella declared, emphasizing the plan’s core premise.

Years in the Making

The diocese filed for Chapter 11 protection in 2020, overwhelmed by hundreds of abuse allegations. Its first restructuring blueprint, submitted in May 2024, was rewritten after the U.S. Supreme Court’s Purdue Pharma decision barred bankruptcy plans from imposing nonconsensual third-party releases.

By December 2024, a revised plan was sent to creditors, fortified by agreements with seven insurance carriers that returned $75.7 million in value to the bankruptcy estate. The combined payout pool now totals $176.1 million—one of the largest settlements of its kind.

Survivors Back the Deal

Counsel for the unsecured creditors’ committee, Robert Kugler, said the vote of support from survivors was resounding. “Every abuse claimant who voted supported the plan,” Kugler noted, adding that his team fielded “hundreds of phone calls” without hearing a single objection.

Still, the U.S. Trustee’s Office pushed back. Counsel Erin Champion argued the plan improperly imposed limits on claimants’ rights, citing a new “gatekeeper” clause requiring survivors to seek court permission before suing insurance carriers or other protected entities. She also insisted that the changes were too sweeping to stand without another vote.

Judge Pushes Back on Objections

Judge Kinsella, however, disagreed. She ruled that the Purdue standard applies to plan provisions, not settlements or property sales like the insurance deals at issue. The modifications, she said, did not alter survivor payouts—only the legal framework surrounding insurers’ releases.

“Let’s face it, the carriers paid millions of dollars. The carriers want it in black and white that they’re released,” diocese counsel Stephen Donato told the court.

Ultimately, Judge Kinsella confirmed the plan, stressing that while money alone cannot heal decades of trauma, the church must implement strong sexual abuse prevention safeguards. “This court wishes you only the best,” she told survivors.

Legal Teams

The Diocese of Syracuse is represented by Stephen A. Donato, Charles J. Sullivan, Sara C. Temes, and Grayson T. Walter of Bond Schoeneck & King PLLC.