The Archdiocese of New York has proposed paying US$800 million (S$1.02 billion) to settle claims from the 1,300 people who say they were sexually abused as minors by priests and lay staff, according to lawyers representing 300 accusers.
The archdiocese would pay each accuser at least US$250,000, according to a letter describing the potential settlement that was sent on April 27 to the accusers by two of the plaintiffs’ lawyers, Mr Jeff Anderson and Ms Trusha Goffe.
The lawyers urged their clients to accept the deal, warning that the archdiocese would most likely file for bankruptcy if they did not – a move that could prolong the litigation and reduce the size of future settlement payments.
“The archdiocese needs all survivors to agree to the proposed settlement in order for it to go forward,” the lawyers wrote in the e-mailed letter, which was obtained by The New York Times.
Under the proposed terms, which were presented after several months of mediation, the two sides agreed that “all survivors” with pending cases against the archdiocese must accept the settlement. The phrase “no holdouts” is written in bold and underlined.
“If there are any holdouts, the global settlement will not be consummated,” documents reviewed by the Times read, and the archdiocese and “participating parties may file for Chapter 11 bankruptcy”.
A spokesperson for Mr Anderson declined to comment.
The proposal comes months after the archdiocese announced plans to drastically cut its costs to fund the settlement.
In December it said it planned to raise at least US$300 million and had reduced its operating budget by 10 per cent. It also sold some of its most valuable properties, including its headquarters on First Avenue and the land it owns beneath the Palace Hotel on Manhattan’s East Side, which sold for roughly US$490 million.
Several Catholic dioceses in New York have filed for Chapter 11 bankruptcy protections, including ones on Long Island and in Buffalo. None is as large or influential as the Archdiocese of New York, which represents 2.5 million Catholics at nearly 300 parishes in Manhattan, the Bronx, Staten Island and the city’s northern suburbs. The archdiocese is also one of the city’s largest landowners, with billions of dollars in real estate holdings.
In February it installed Bishop Ronald A. Hicks as its 11th archbishop, replacing Cardinal Timothy Dolan, who had led the archdiocese for more than 16 years and helped steer it through the sexual abuse settlement process. Cardinal Dolan submitted his resignation to the pope in 2025 after turning 75, the age at which bishops traditionally retire.
Representatives for the archdiocese did not immediately respond to a request for comment. But in April, Our Town, a local news outlet, reported that church leaders were warned that bankruptcy was an option.
Under the proposed terms, the archdiocese would pay US$800 million into a trust for the 1,300 survivors in two payments over 15 months. The first payment of US$615 million would be made July 27, according to documents.
Accusers would have the option of a US$250,000 “quick pay” agreement or a claims review process administered by the trust and performed by a claim reviewer. The review would take into account what happened to each plaintiff and the effect it had on them.
The archdiocese would also have to publicly disclose information about the offenders and other “secret documents” that would help “better protect kids in the future”, the lawyers said. And it would be required to maintain on its website a list of bishops, priests and deacons who had been “credibly accused” of abuse, and periodically update the list with “future substantiated claims”.
Up to US$100 million of the initial US$615 million payment would go toward administrative costs, including the expenses of the accusers’ lawyers, US$30 million for the archdiocese’s insurance counsel, and US$25 million for any additional claims that could arise against the archdiocese based on the city’s Gender-Motivated Violence Act.
The archdiocese had enlisted Mr Daniel J. Buckley, a retired judge from California, to mediate the terms of the settlement. Mr Buckley negotiated a settlement between the Archdiocese of Los Angeles and victims of sexual abuse in October 2024, resulting in an US$880 million settlement – the highest single sum paid by a diocese.
One accuser, who asked for anonymity to discuss their reaction to the proposed settlement, said they felt as if they were being bullied into accepting the terms of the agreement because of the requirement that there be “no holdouts” before the offer could move forward.
Mr Anderson and Ms Goffe wrote that they had been in weekly mediation sessions for several months. The lawyers said they had reviewed the archdiocese’s finances, assets and the availability of insurance to achieve the “best possible outcome” for the accusers.
“If the cases against the archdiocese do not settle now, then the archdiocese will almost certainly file for Chapter 11 bankruptcy,” the lawyers wrote.
“This would start a lengthy bankruptcy process resulting in several more years of fighting about the archdiocese’s assets, battling with their insurance companies, millions of dollars spent on bankruptcy costs and fees, and likely the same or worse financial outcome for survivors.” NYTIMES