Baltimore Archdiocese insurer agrees to pay victims $100M

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One of the insurance companies covering the Archdiocese of Baltimore has agreed to pay $100 million to victims of sexual abuse, a settlement that represents major progress after an impasse over the church’s liability stalled negotiations for most of last year.

The Hartford insurance group agreed to pay $100 million to settle with survivors and to buy back its insurance policies from the archdiocese, according to a Friday filing in Maryland U.S. Bankruptcy Court. The Hartford is the first of the archdiocese’s insurers to agree to a settlement.

Outside the dollar amount, the full terms of the settlement have not yet been negotiated.

Paul Jan Zdunek, who chairs the committee that represents survivors in the case, called the settlement a “central milestone.”

“This settlement was directly negotiated by the committee, with the support of counsel, and represents a significant step toward accountability and resolution,” he said in a statement provided by an attorney.

Teresa Lancaster, who is both a survivor with her own claim and a lawyer representing victims, said she appreciated the company “stepping up with a realistic offer.”

“We need the other insurance companies to follow Hartford’s example,” she wrote in an email. “Also, the church needs to step up and propose a decent offer.”

Jonathan Schochor, a Baltimore attorney who represents many victims and one member of the survivors’ committee, likewise said he was grateful to The Hartford. He noted that victims won’t receive anything until all parties agree to a reorganization plan and said the agreement could put pressure on the archdiocese to make a deal sooner than later.

“I am proud of them,” he said. “I hate insurance companies but not The Hartford. . . I think they stepped up and did the responsible thing.”

The church did not comment on either the agreement with The Hartford or on the reorganization plan.

“The archdiocese is committed to the process and with the Survivors Committee and others to achieve an agreed-upon resolution of these reorganization proceedings,” spokesperson Christian Kendzierski stated in an email.

The Hartford declined to comment.

The agreement with The Hartford is part of the committee’s proposed framework to end the Chapter 11 bankruptcy, known as a reorganization plan. The roughly 920 survivors with claims in the case would have to vote to approve the plan; the archdiocese or its other insurers could oppose it. The approval process is likely to take months. Survivors will have more than a month to vote, and the judge’s eventual approval of the plan could be appealed.

The plan would have the nation’s oldest archdiocese and its affiliates pay more than $441 million into a trust to pay abuse claims. That figure is far from a certainty, but it is less than the nearly $900 million the committee said the church owed victims last fall.

Victims would be prevented from suing the archdiocese and its affiliates that are parties to the agreement, but they would still be able to sue their abusers.

Zdunek called the reorganization plan a “clear, actionable roadmap to bring this case to conclusion” after years of litigation “with little sense of direction or resolution.”

The size of an eventual settlement — and the proportions of that settlement paid by the church and its insurers — have been the subject of behind-the-scenes negotiations for months.

In October, the archdiocese announced it would be willing to pay just over $33 million of its own money, saying it expected its insurers to pay hundreds of millions of dollars. Attorneys for survivors called that amount “insulting.”

Early in the case, lawyers for the archdiocese said the church expected to contribute about 40-45% of the settlement, according to sources.

The archdiocese filed for bankruptcy in September 2023, just before the Maryland Child Victims Act became law. That legislation ended the statute of limitations for abuse survivors to sue the institutions that employed their abusers, allowing people to come forward decades after they were abused.

Anticipating a flood of lawsuits under the new law, the church sought the protection of the bankruptcy process, which prevents civil lawsuits.

Last year, the church attempted to limit its liability through the doctrine of charitable immunity. That doctrine is intended to protect donors to charities, with the premise that they want their money to support the charity’s core mission, not litigation.

The committee objected, asking a judge to dismiss the bankruptcy if that defense was available to the church. If its assets were immune, the committee argued, it wasn’t in debt and therefore shouldn’t have been in bankruptcy.

But in December, the church agreed not to pursue charitable immunity, allowing settlement negotiations to begin in earnest.

This story has been updated with a comment from the archdiocese.