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.”