Diocese of Camden bankruptcy plan confirmed, but survivors' fight to continue

CAMDEN – The Diocese of Camden is to pay $87.5 million to survivors of clergy sex abuse under a plan approved by a bankruptcy judge.

A trust intended to help some 300 abuse survivors will receive payments from the diocese and related entities over a five-year period, court records show.

The reorganization plan, which was confirmed about 3½ years after the diocese sought bankruptcy protection, also calls for "maintaining and enhancing the protocols for the protection of children," Bishop Dennis Sullivan said in a statement.

But the survivors' fight isn’t over, said one lawyer involved in the case.

The agreement allows survivors to sue the diocese’s insurers for additional payments of as much as $400 million to $600 million, said John Baldante, a Philadelphia attorney.

"We believe that the larger liability is yet to come in this case,” Baldante said in an interview Saturday.

In a statement, Sullivan said the plan was "a just resolution for survivors, while also ensuring that the diocese is able to continue to provide its services and ministries to the people of South Jersey."

State board takes action:Cinnaminson teacher, who fathered teen's child as priest, loses certificates

The agreement was filed by the diocese and a creditors committee representing abuse survivors.

U.S. Bankruptcy Judge Jerrold N. Poslusny Jr. approved it in an order entered March 15.

Funding for the trust represents "one of the largest cash payments by any U.S. Catholic diocese in bankruptcy to date," said a statement from Jeffrey Prol, an Essex County attorney for the creditors committee.

Insurers' concerns blocked earlier plan

The diocese initially agreed to an $87.5 million payment in April 2022, but the deal was delayed by opposition from insurers.

The confirmed agreement, described as the "third modified plan," included changes required by Poslusny over the past month "to meet legal requirements," said Jeff Anderson, a St. Paul, Minn., attorney for sex abuse victims.

He said the plan was supported by 99 percent of the survivors who voted on it.

It was approved "despite objections from several insurance companies who did not contribute to the deal," his statement added.

Baldante said the insurers have refused to pay the diocese’s claims on policies intended to cover its negligent supervision of sex abusers.

“The diocese of Camden did the right thing in standing up and being accountable,” said Baldante. “It’s a shame the insurance carriers aren’t willing to recognize their responsibility.”

Representatives of the insurance firms could not be reached for comment.

Under the plan, the diocese is to pay about $67 million to the trust over a five-year period.

Payments of $10 million apiece are to come from another diocesan trust and from parishes, schools and missions.

"Ministry entities" are to provide $250,000.

The attorneys praised the survivors, with Prol, an attorney at Lowenstein Sandler, calling them "the real heroes in our battle."

“This moment comes after decades of survivors suffering, and it is their courage and their voice that is making the diocese accountable and safer for kids," Anderson said.

The two sides clashed sharply in the wake of the bankruptcy filing, with attorneys for survivors claiming in 2021 that the diocese was concealing assets.

But in announcing resolution of the dispute, Sullivan expressed gratitude to attorneys on both sides "for working together to reach a settlement."

He also thanked Poslusny "for providing a fair venue for this case and for ensuring the interests of the survivors and the Diocese of Camden were considered justly."

The bishop also offered "my sincere apology to all those who have been affected by sexual abuse in our diocese."

The diocese sought bankruptcy protection in October 2020, citing the financial impact of the pandemic and mounting damages awarded to victims of sex abuse by clergymen.

Sullivan at that time said the diocese had paid more than $8 million to settle abuse lawsuits and was facing more than 50 others.

The suits generally claim the diocese failed to protect children from predator priests from the 1960s to the early 1990s.

The diocese, which serves about 486,000 Catholics in six South Jersey counties, implemented its protocols to better protect children in 2002.

Jim Walsh is a senior reporter for the Courier-Post, Burlington County Times and The Daily Journal. Email: Jwalsh@cpsj.com.