New Settlement Deal Floated for Archdiocese Sex Abuse Victims

In a bid to salvage its out-of-court global settlement, the Archdiocese of New York and the law firm representing 1,300 survivors of sexual abuse from clergy are exploring a new deal with a carveout for a tiny number of victims who are not willing to sign onto the original proposal.

But if there are any more defections from the original class by Sept. 30, the Archdiocese will declare bankruptcy, which the law firm representing the class warned could tie up the settlement for years, according to a 37-page document viewed by this publication.

In a letter to members of the class, the law firm Jefferson Anderson & Associates wrote, “The good news is that since you agreed to the proposed settlement agreement, there is another $38.75 million that will be available for survivors going through the allocation process. The ADNY is also paying the holdout survivors as well so that issue will be resolved. The ADNY is likely making these payments with money expected from a resolution with one of its excess insurance companies, Great American. “

In a background note, the law firm said, “Over the last months, great efforts have been made towards getting the settlement done for you and other survivors without further delay. As we advised you previously, the sticking point was two groups of survivors: 1) survivors that died, could not be located, or were representing themselves and 2) a handful of survivors that did not agree to the proposal, the holdouts. “

The new agreement is being floated this week because the original $800 million agreement required every member in a class action to agree to the settlement by July 29. That did not happen, but the two sides continued to negotiate and now have a new tentative agreement awaiting final approval with a carve out for less than 20 people.

The new agreement obtained exclusively by this publication will now propose a $22.5 million set aside while the Archdiocese and the law firm seek to come to agreement with the estate of six claimants who passed away and eight members of the original class who balked at a settlement.

Neither the Archdiocese nor Jefferson Anderson & Associates returned emails seeking comment.

But the clock is ticking. Aside from the tiny number of claimants covered by the carve out, all other members still in the class must agree to the settlement by Sept. 30.

The class action lawsuit would cover credible abuse claims filed against virtually every one of the parishes in the archdiocese, St. Patrick’s Cathedral, numerous high schools and elementary schools including some that have closed and some that are still operating today. Also party to the settlement would be organizations that were sued including the Catholic Youth Organization and Catholic Charities. In total, 540 different defendants would be covered by the proposed settlement.

Not included in the settlements are claims against religious orders which do not report into the Archdiocese but often worked in the schools and other organizations within the archdiocese.

If any members of the class pull out by a September 30 deadline the Archdiocese will declare bankruptcy, the law firm warned the class.

The law firm warned, “The ADNY has said that if there are any survivors that change their decision, it will file bankruptcy. The bankruptcy process would take years and may not result in more money. On the other hand, if everyone who previously agreed maintains that decision, survivors will receive their settlement much sooner, likely years sooner.”

If none of the remaining members of the class pull out, the new settlement takes effect on Oct. 1.

Still to be resolved is how the Archdiocese plans to raise the money to pay off the claimants in the $800 million out-of-court settlement that is being overseen by retired Los Angeles-based Judge Daniel Buckley. In December, 2025, he was appointed to negotiate a global out-of-court settlement. In October, 2024, he had overseen an $800 million settlement between the Los Angeles Archdiocese and about 1,300 claimants there who said they had been sexually abused by priests and lay personnel.

The Archdiocese in its public statements, said it had only $300 million in the sex abuse fund, which appears to leaves it $500 million short.

Shortly after Judge Buckley was appointed as mediator in early December, Cardinal Timothy Dolan announced he was stepping down as the top cleric of the nation’s third largest diocese overseeing 2.2 million Catholics since he had reached the mandatory retirement age for cardinals. Over the past several years he had been accelerating the sell off of shut down schools and churches. Dolan had overseen the sale of the former 20-story Archdiocese headquarters on First Avenue for $103 million which a developer plans to convert to a mixed use residential/commercial tower. Dolan also supervised the sale of the land the Archdiocese owned underneath the Lotte New York Palace Hotel for $490 million. He also sold off smaller school and church parcels.

It will fall to newly installed Archbishop Ronald Hicks to finish the sell off and close the looming $500 million funding gap.

As reported exclusively here in May, the Archdiocese had summoned pastors of every parish in the Archdiocese that includes Manhattan, the Bronx, Staten Island, as well as Westchester, Rockland, Putnam and Orange Counties to a meeting at Duwoodie Seminary in Yonkers to outline the dire financial straits the Archdiocese is in. At that meeting in late April overseen by financial officials of the Archdiocese, all pastors were told that all schools and churches, would have to dip into their own reserve funds to help close the funding gap. The Archdiocese warned that without funds from the parishes, it would be forced to declared bankruptcy. One pastor at the time called bankruptcy “the nuclear option.”

More recently, the Archdiocese told Straus News it is trying to use six properties to secure a loan to raise money for the fund.

“The Archdiocese of New York intends to petition the New York State Supreme Court for approval to secure a loan collateralized by six Archdiocese properties,” said spokesman Joseph Zwilling. “The Archdiocese remains committed to securing just compensation for victim-survivors, and this financing is part of that continued effort.”

The Archdiocese so far declined to say which schools or churches or other properties would be included in the collateral package.