New Settlement Deal Floated for Archdiocese Sex Abuse Victims

In a bid to salvage its $800 million 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.

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. Each member of the class would receive about $250,000 in exchange for dropping all future claims under terms of the original proposal from May.

Neither the Archdiocese nor Jefferson Anderson & Associates, the law firm representing roughly 1,300 claimants in the class action lawsuit, 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.

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, often against objections from local residents who wanted the historic structures saved.

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 properties of six shut down institutions as collateral for a loan with a bank to raise funds for the sex abuse victims. The Archdiocese so far declined to say which schools or churches would be included in the collateral package since it has to get approval from New York State regulators governing how not-for-profit entities can use their assets.

City Council member Carl Wilson led a protest rally when he learned that Our Lady of Guadalupe Church and two shut down schools in Chelsea could be sold off.

Local preservationists are trying to get Most Holy Redeemer Church, known as the German Cathedral of the Lower East Side, declared a landmark after the Archdiocese stopped holding regular Masses there in September, 2025. St. Mary’s Church on Grand Street was in fact recently granted landmark status by the Landmarks Preservation Committee, which makes it difficult to sell to a developer. Most Precious Blood, which is central to the San Gennaro Festival in Little Italy, has also been rumored to be a potential sale target ever since it was de-merged in 2024 from its former affiliation with the Basilica of Old St. Patrick’s Cathedral. The shut down St. Brigid’s Elementary School near Tompkins Square Park in the East Village, is currently being marketed as a potential site for luxury real estate developer.

On the Upper East Side, the all girl’s Cathedral High School shut down at the end of the 2025-26 school year. No plans for the shut down school building have been publicly revealed.

On the Upper West Side, the former school and convent belonging to Holy Name of Jesus School on West 97th Street were sold to the Rockefeller Group last year for $93 million. Work recently began to build a 28 story tower containing 340 apartments on the site.