620 B.R. 445
Bankr. W.D.N.Y.2020Background
- The Diocese of Buffalo filed Chapter 11 on Feb. 28, 2020 after the Child Victims Act (CVA) reopened certain abuse claims; by filing it faced hundreds of alleged abuse claims and an anticipated total >400 claimants.
- On the petition date the Diocese also commenced an adversary proceeding seeking declaratory relief against eight insurers that had disclaimed coverage.
- The Diocese moved to (1) refer the insurance adversary to mediation and (2) set a bankruptcy claims bar date, propose an expanded sexual‑abuse proof‑of‑claim form, and adopt confidentiality protocols with a claims agent (Stretto).
- The Official Committee of Unsecured Creditors and several insurers objected to aspects of both motions; the Committee urged aligning the bar date with the CVA extension (Aug. 14, 2021).
- The Court held evidentiary/administrative facts: an insurance archivist had been retained but had not completed a comprehensive report; limited pleadings and little discovery had occurred in the adversary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to refer the insurance adversary to mediation | Mediation will facilitate a global resolution of insurance coverage and help plan formation | Premature: key parties and insurers not involved; archival insurance review incomplete; claims and discovery not yet developed | Denied without prejudice; mediation premature pending full archival report, claims identification, and discovery |
| Appropriate claims bar date | Set Jan. 15, 2021 to move case forward | Committee: set Aug. 14, 2021 to align with CVA extension and avoid claimant confusion | Bar date set to Aug. 14, 2021 (coterminous with CVA extension) |
| Whether to require an expanded Sexual Abuse Proof of Claim (modified Official Form 410) and treat failure to submit it as untimely | Diocese: detailed questions needed to process and evaluate abuse claims | Opponents: Official Form 410 is mandatory; expanded form could chill filings and cannot be forced; objections must follow Rule 3007 | Denied: proofs must conform substantially to Official Form 410; cannot force use of expanded form or deem claims untimely for not using it |
| Confidentiality protocols and exclusivity of claims agent (Stretto) | Use Stretto as exclusive claims agent and restrict access to filings to protect victims’ privacy | Clerk should accept filings; agent need not be exclusive; public filing must remain available | Approved retention of Stretto as claims agent and confidentiality for claims filed with it, but agency is non‑exclusive and the Bankruptcy Clerk may accept public filings |
Key Cases Cited
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (establishes constitutional due‑process notice standards and limits of publication notice)
- In re A. H. Robins Co., Inc., 862 F.2d 1092 (4th Cir. 1988) (cited regarding post‑claim questionnaires and claims‑processing approaches)