Diocese of Norwich committee gets green light to file competing plan

By Sarah Lizee

Olympia, Wash., Feb. 27 – The official committee of creditors of Norwich Roman Catholic Diocesan Corp., known as the Roman Catholic Diocese of Norwich, received approval to file a competing Chapter 11 plan, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Connecticut.

The court terminated the diocese’s exclusive period to solicit votes on a Chapter 11 plan at the committee’s request and gave the committee until Feb. 28 to file its plan.

As previously reported, the diocese filed a Chapter 11 plan on Jan. 17.

The committee had said the plan isn’t consensual and negotiations toward a global resolution are at an impasse.

The diocese’s proposed plan would create a fund of about $29 million, which net of expenses would result in an average distribution of just over $200,000 to 142 victims of abuse.

The plan also proposes that some parties, including insurer Catholic Mutual and the diocesan parishes, would receive broad releases from third-party claims.

“The distributions proposed in the proposed plan are far short of what is necessary to even remotely adequately compensate victims of sexual abuse – the distributions being proposed are a relatively small fraction of what individual claimants receive as judgments on account of abuse of the type suffered here,” the committee said in the motion.

The committee said the debtor and other parties have assets that are available to pay victims, but they are unwilling to part with those assets.

“Rather than seek maximum compensation for victims of sexual abuse, the debtor at this point is using this case to protect Catholic Mutual and the diocesan parishes,” the committee said.

Also on Friday, the court appointed former Second Circuit justice Christopher Droney to substitute as mediator for the parties for up to 60 days. Previously, Paul A. Finn acted as mediator.

The diocese had asked the court to extend the mediation, and the committee objected.

A status conference is scheduled for March 14. At that time, the court will address scheduling concerning the competing plans.

The Norwich, Conn.-based diocese filed bankruptcy on July 15, 2021 under Chapter 11 case number 21-20687.

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