In 2019, New York State Governor Andrew Cuomo signed The Child Victims Act which temporarily increased the state’s statute of limitations in child sexual abuse cases. The law extended the time for a victim of child sexual abuse to bring a criminal complaint as well as the time to commence a civil action. After this statute was enacted, many civil lawsuits were brought against institutions that allegedly harbored the abusers. Overwhelmed with litigation, some of these institutions sought bankruptcy protection. Specifically, earlier this year, the Boy Scouts of America filed a chapter 11 petition in Delaware bankruptcy court after facing hundreds of individual sexual abuse lawsuits. More recently, the Archdiocese of Rockville Centre filed for a chapter 11 reorganization after suffering financial losses due to litigation costs incurred in defending sexual abuse claims. Upon the filing of a bankruptcy petition, a sexual abuse civil action is stayed from commencing or continuing. While this is quite frustrating to a victim, a victim’s rights and remedies are not discarded because of the bankruptcy. The victim is a creditor in the bankruptcy and must take steps to protect his or her rights. A chapter 11 bankruptcy is a reorganization proceeding which means that a plan will be proposed and will state how the creditors will be paid. There is a misconception that the bankruptcy code only protects the debtor or the one who files the petition. The bankruptcy code contains many provisions that protect the rights of creditors or those who have a claim against the debtor. One of the first steps that a creditor should take is to make sure he or she is aware of what is happening in the bankruptcy proceeding. If the victim was listed in the bankruptcy petition, the victim should receive notice of the important hearings that occur in the case. If the victim was not listed, a notice of appearance should be filed which requests service of all papers filed in the bankruptcy proceeding. A victim should also file a proof of claim which sets forth the basis of the victim’s claim and the amount that the victim is asserting is owed to him or her. Litigation that has not resulted in a judgment or a settlement will have to be reduced to an amount and a procedure will be set for this process. There will be a deadline set to file a proof of claim which needs to be adhered to. A chapter 11 bankruptcy plan will be proposed and that plan will need to be reviewed by a qualified bankruptcy attorney to determine whether it comports with the requirements of the bankruptcy code. Bankruptcies are complicated and it is important that the victim is represented by counsel who has experience with bankruptcy proceedings. In addition, there are all sorts of deadlines in a bankruptcy case that need to be monitored. Therefore, hiring bankruptcy counsel to protect the rights of victims of child abuse in a bankruptcy case is just as important as retaining counsel to initiate the sexual abuse claim prior to the filing. Although a bankruptcy filing undoubtedly frustrates and delays a sexual abuse victim’s day in court, it is not the end of the road for the victim. A competent bankruptcy attorney will protect the victim.
Kimberly Berson is an attorney with over 25 years in the bankruptcy field. She has represented debtors as well as creditors in individual bankruptcy proceedings as well as business bankruptcy cases. She helps individuals and businesses who are experiencing financial difficulties. She is also a member of the academic community and teaches paralegal and legal studies courses. She may be reached at 516-847-5122 or kbersonlaw@gmail.com . You may visit her website at www.kbbankruptcylaw.com.
#sexualabusevictims #bankruptcy #boyscouts #archdioceseof rockvillecentre
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