CT diocese to auction off school to compensate sex abuse survivors

The Roman Catholic Diocese of Norwich will auction off the 113 acres in Montville that is home to St. Bernard School on June 5, as it works its way through bankruptcy proceedings.

A negotiated reorganization plan will come next, which must be approved by the parties involved and by a federal bankruptcy court judge.

The diocese filed for Chapter 11 bankruptcy in July 2021, faced with 142 claims of sexual abuse, according to the diocese. The first lawsuits were brought by families of students at Mount St. John’s Academy in Deep River. 

Patrick Birney, an attorney with Robinson & Cole in Hartford, is overseeing the auction, which is planned “to raise in excess of $6.5 million to fund a portion of the settlement that will be used to compensate alleged sexual abuse survivors under a consensual Chapter 11 bankruptcy plan,” according to an email from Birney.

At least three bidders have expressed interest in the auction, which will have a $6.5 minimum bid: Thames River Acquisition LLC; Saints Country LLC, a consortium of St. Bernard alumni; and Bill Buscetto, a St. Bernard alum and former athletic director, Birney wrote.

Buscetto was an All-America catcher for the University of New Haven from 1992-95 who sued the diocese after he was fired as athletic director and coach in 2011. He could not be reached for comment.

Birney wrote that the three known bidders “have all made clear to the diocese that their intent is to see the school continue into the future. The sale process contemplates a new, initial 10-year lease between the prevailing bidder and the school with an option for an additional 10 years.”

However, it is possible another bidder would close the school, Birney wrote.

“The diocese is deeply committed to providing Catholic education through the primary and secondary Catholic schools within the diocese, including St. Bernard,” he wrote. “Nevertheless, the diocese recognizes that there is a chance that a prospective purchaser may emerge who does not have an interest in continuing St. Bernard School.”

Birney said he was not aware of any plans the bidders may have to develop a portion of St. Bernard’s 113 acres.

The diocese and the Official Committee of Unsecured Creditors, which includes the sexual abuse survivors and others seeking money from the diocese, each have submitted plans for reorganization. They are negotiating a compromise plan that will be presented to the bankruptcy court for approval, possibly in June.

Stephen Kindseth of Zeisler & Zeisler in Bridgeport, representing the unsecured creditors, declined to comment.

Under the diocese’s plan, a $29 million trust would be set up to compensate the victims of sexual abuse. The committee’s plan proposes a fund of $30.8 million plus unknown amounts from “causes of action” and “insurance interests.”

Birney said the diocese’s plan also includes selling the Middletown property where Xavier High School is located to the Xaverian Brothers, who run the school. He said it would not be auctioned. The diocese also owns the Middletown property where Mercy High School is located.

Kelly Reardon of  The Reardon Law Firm in New London represents about 30 of the sexual abuse survivors who will be affected by the bankruptcy.

“I think that overall through the process we have been successfully able to protect our clients’ interests, or at least I have, and I think the other plaintiffs’ lawyers have as well in terms of trying to negotiate as beneficial and robust a settlement as possible,” she said.

She said she is working to be sure the money available in the final bankruptcy settlement “is allocated in as equitable a way as possible.”

When the diocese filed for bankruptcy, Bishop Michael Cote said, “By filing for bankruptcy relief, the diocese is seeking to ensure a fair and equitable outcome for everyone involved. That is because the bankruptcy court will centralize all litigation and oversee a settlement that ensures that all survivors are included and treated fairly.”

He added, “Individual private litigation could deplete the diocese’s funds with the first case, leaving other survivors without any possibility of compensation.”

“I certainly think that they could have achieved the same goal without filing bankruptcy and prolonging resolution for going on two years now,” Reardon said. “But, that having been said, it was done and, on behalf of my clients, I’m simply trying to achieve the highest possible resolution for them.”

The abuse survivors are the largest party in the bankruptcy negotiations, which also includes “Mount St. John’s, the parishes, the diocese, the Annual Catholic Appeal, pretty much every Catholic entity in the diocese, the schools and the insurance company,” Reardon said.

“So it’s essentially a plan for resolving the bankruptcy that includes contributions and agreements by all of the different affected parties,” she said.

The diocese’s insurance agent is the Catholic Mutual Relief Society of America.

A diocesean spokesman said the diocese would have no comment for this story.

The Diocese of Norwich includes 51 parishes in Middlesex, New London, Windham and Tolland counties and Fishers Island, New York.

Ed Stannard can be reached at [email protected].