Judge Littlefield Rules Insurers Do Not Have Standing to Object to Survivor Claims

In a significant victory for Survivors, Judge Littlefield has issued a decision that has wide-ranging implications. Specifically, Judge Littlefield concluded that insurers who deny that they are financially responsible for survivor claims do not—without more—have standing (the ability to act in Court) to object to survivor claims. The decision is instructive with regard to when and whether insurance companies have the ability to act in bankruptcy cases.

In the Diocese of Albany case, two of the Diocese’s insurance carriers, London Market Insurers and the Hartford, objected to nearly 50 survivor claims. The Committee challenged the objections, arguing that the insurers did not have standing to object. Judge Littlefield agreed, writing:  “As the Court stated on the record, it is difficult to “understand how [the Insurers] create the thread that [the Insurers] have standing when [they] have nothing at stake, [they] have no skin in the game.” 

The Committee applauds this decision and is hopeful that it will recognized across the country in situations where insurance companies attempt to interfere in bankruptcy cases to the detriment of Survivors.

The Diocese of Sacramento obtained approval from the Bankruptcy Court to sell a property located in Dixon, California for $502,500. The proceeds of the sale will stay with the Diocese until the case is resolved.   In the professional opinion of FTI (our real estate advisors), this sale price is within the range of reasonable values for the property, so the Committee supports the sale.  The Committee will continue to review all proposed real estate sales to ensure that the maximum amount will be available to Survivors in a bankruptcy settlement.

On July 25, 2025, Judge Klein granted four Survivors relief from the automatic stay to pursue their cases against the Diocese and affiliated co-defendants in state court. The automatic stay is a mechanism in bankruptcy cases that “stays” or suspends actions, including lawsuits, against the bankrupt entity for the duration of the bankruptcy case. Here, when the Diocese filed for bankruptcy, Survivors were prevented from continuing their lawsuits against the Diocese because of the automatic stay.  With the joint support of the Committee and the Diocese, and over numerous objections from the insurance companies, the Bankruptcy Court modified the automatic stay so that four Survivors can proceed with their cases against the Diocese and affiliated co-defendants in state court. In addition to ending decades of silence about the horrors of abuse within the Diocese, the Committee believes that these cases will spur progress in the ongoing mediation in the bankruptcy case as they (1) will provide information regarding the value of all Survivor claims; and (2) alter the current mediation dynamics, which are ongoing. 

A Survivor in New York was recently awarded $30 million by Supreme Court Justice Meagan K. Galligan.  Represented by Pfau Cochran Vertitis Amala, the Survivor was abused at a Boy Scout Camp by the defendant who was unlawfully posing as a doctor.   Details of this case can be read via this link.  Please be aware that details may be difficult to read and re-traumatizing for some Survivors.  From that article, Ben Watson an attorney representing the Survivor commented “This verdict is a major victory for Mr. Pringle and for survivors across New York.  It also sends a clear message to any individual or institution that believes they can get away with the sexual abuse of children: the law will hold you accountable.”

The Diocese of Sacramento has proposed the sale of a property located around Highway 80 & Placer Hills Road in Colfax California for $450,000. The proceeds will stay with the Diocese until the case is resolved.   In consultation with FTI, our real estate advisors, this sale would be within the range of reasonable value for the property, so the Committee is not objecting.  The Committee will continue to review all proposed real estate sales to ensure that the maximum amount will be available to Survivors in a bankruptcy settlement.

In what is a victory for all Survivors who find themselves part of a Diocese bankruptcy, a Survivor abused by a Diocese of Winona NY priest has been awarded $7.6 million by a jury.  This is an important development because the defendant in the lawsuit was US Fire Insurance, an insurer who chose not to settle with the Official Committee of Survivors in the Winona bankruptcy.  Now, that insurer is liable for this settlement and the costs associated with its defense.  Further information regarding the Winona decision can be found at Survivor Abused by Diocese of Winona Priest Sees Victory in the Courtroom, Awarded $7.6 Million – Jeff Anderson and Associates

1. Survivor Impact Statements:  On March 31, 2025, ten Survivors presented impact statements at a hearing before the Bankruptcy Court.  Bishop Jaime Soto and other Diocese representatives were also present to hear the impact statements.  The Survivor Committee is grateful to the brave Survivors who shared the truth about their abuse and its effect on their lives.  The Survivor Committee is also hopeful that the impact statements will increase understanding regarding the tremendous pain and challenges Survivors endured and continue to endure as a result of their difficult experiences.  At this time, no additional hearings for the presentation of impact statements have been scheduled or approved by the Bankruptcy Court, but additional hearings may be possible if more Survivors express an interest in presenting a statement.  
2. Mediation:  Mediation is a process that allows Survivors, through the Survivor Committee, to negotiate a settlement with the Diocese and the Diocese’s insurers.  Mediation is ongoing with Roger Kramer serving as the mediator.  The Survivor Committee is negotiating the financial terms of a settlement and will also press the Diocese to strengthen its child protection policies to ensure that children are safer going forward.  The Court requires that the Survivor Committee keep information about its negotiations with the Diocese during mediation confidential.  Survivors sometimes find this challenging because they do not have information about how things are progressing.  If you have questions, or are experiencing frustration during the mediation, remember that the Survivor Committee is made up of nine Survivors, and that they are dedicated to representing all Survivors in the case as effectively as possible.  You are also welcome to contact the Stinson team via sacramentosurvivorteam@stinson.com, or have your own attorney(s) contact Stinson, any time.  We always welcome your questions and thoughts.
3. State Court Actions:  Upon the filing of the bankruptcy petition, all state court actions against the Diocese and its affiliates were automatically paused (i.e., stayed).  Those state court actions are consolidated for procedural purposes before Judge Chatterjee in the Superior Court of California, Alameda County.  On April 28, 2025, the Diocese filed a complaint in the Bankruptcy Court seeking confirmation that the automatic stay applies not just to claims against the Diocese, but also to claims against its affiliates.  The initial hearing on the complaint is scheduled for June 25, 2025.

The Official Committee of Survivors of Sexual Abuse appointed to advocate for all Survivors in the Sacramento Diocese bankruptcy has noted the election of a new leader of the Catholic Church, Pope Leo XIV.  This has raised concerns among some regarding his commitment to the prevention and investigation of sexual abuse in the Church.  This article summarizes those concerns.  The Official Committee wishes to acknowledge those concerns and share that it is fully committed to its work in this bankruptcy to both gain a financial settlement for Survivors and the adoption of policies that will end sexual abuse within the Church.