Diocese of Rockville committee reach settlement over property transfer

By Sarah Lizee

Olympia, Wash., Oct. 10 – The Roman Catholic Diocese of Rockville Centre, New York’s official committee of unsecured creditors are seeking approval of a settlement relating to the prepetition transfer of about 216 acres of property in New York, according to a motion filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said it seeks approval of the settlement of the estate’s fraudulent transfer and unjust enrichment claims against the Seminary of the Immaculate Conception of the Diocese of Rockville Centre arising from a prepetition transfer by the diocese to the seminary of the property, which including a historic seminary and related buildings, furniture and artwork.

The diocese made a transfer of the property to the Seminary of the Immaculate Conception of the Diocese of Rockville Centre in exchange for $10.00.

The committee alleges that the transfer was made in anticipation of a surge of lawsuits filed by survivors of childhood sexual abuse and in an effort to move the diocese’s assets beyond the reach of survivors.

Through the settlement agreement, the seminary will sell the majority of undeveloped land that was the subject of the transfer (about 200 of the 216 acres). Of the sale proceeds, 80%, but not less than $16 million, will be paid either to (i) a trust for the benefit of survivors created in connection with a confirmed plan of reorganization, or (ii) if the bankruptcy case is dismissed, to the diocese.

The seminary will retain about 16 acres, including the related buildings and personal property.

Upon payment of the settlement amount to either the abuse claims trust or the diocese, the seminary will be released from its liability to the estate and its creditors arising out of or relating to the transfer, and the committee will release the lis pendens recorded against the real property.

The Rockville Centre, N.Y.-based diocese filed bankruptcy on Oct. 1, 2020 under Chapter 11 case number 20-12345.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.