Buffalo Diocese Seeks Reversal of 'Opt-Out' Liability Ruling

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The Diocese of Buffalo and a group of sex abuse claimants urged a court to reconsider its ruling that the Catholic group's bankruptcy plan can't force voting creditors to surrender their right to sue church affiliates without express consent. The diocese and a committee of unsecured creditors argued that requiring creditors to affirmatively opt in to third party liability releases is impractical and potentially fatal to a settlement meant to pave the way for the institution to exit bankruptcy after more than six years.

Why it matters

The Diocese of Buffalo has been in bankruptcy proceedings for over six years due to mounting sex abuse claims. The court's ruling that creditors must opt in to liability releases, rather than opt out, threatens to derail a potential settlement and the diocese's ability to emerge from bankruptcy, which has significant implications for the Catholic Church and victims seeking compensation.

The details

In March 2026, the Diocese of Buffalo and a committee of unsecured creditors filed motions urging the US Bankruptcy Court for the Western District of New York to reconsider its ruling that the diocese's bankruptcy plan cannot force voting creditors to surrender their right to sue church affiliates without their express consent. The diocese and creditors committee argued that requiring creditors to affirmatively opt in to third party liability releases is impractical and could jeopardize a settlement meant to allow the diocese to exit bankruptcy after more than six years of proceedings.

• The Diocese of Buffalo has been in bankruptcy proceedings for over 6 years.
• On March 13, 2026, the diocese and a committee of unsecured creditors filed motions urging the court to reconsider its ruling.

What’s next

The judge in the case will decide whether to reconsider the ruling on the diocese's bankruptcy plan and liability releases for creditors.