New York churches will pay $300 million in compensation to people raped by priests.

On December 8, the Archdiocese of New York announced the creation of a $300 million fund. This money will be used to compensate people who have filed lawsuits alleging sexual abuse by priests and other church officials. ABC7 tells who can receive compensation.

Archbishop Timothy Dolan said the fund would be formed through budget cuts and asset sales, including the archdiocese's former headquarters in Manhattan.

Source of funding for the fund

In a statement, Cardinal Dolan noted that the archdiocese would reduce its budget and sell some assets. He emphasized that the purpose of these steps was to ensure that the fund "is allocated to compensation victims of sexual violence."

One such asset was the former archdiocese headquarters. The sale of the building is expected to be completed. The proceeds will go to the foundation.

Mediator for negotiations

The archdiocese agreed to engage retired Judge Daniel J. Buckley as a mediator.

He will lead negotiations between the archdiocese and the victims with the aim of reaching an agreement.

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Buckley had similar experience before, having participated in negotiations between the Los Angeles Archdiocese and more than 1000 victims.

However, experts warn: the task is enormous, and the mediator lacks legal authority. If one party decides to withdraw from the process, the mediator will be powerless to stop it.

How many people can receive compensation?

The case concerns approximately 1300 victims who said they were sexually abused by clergy and church employees as children.

Attorney Mitchell Garabedian, who has represented victims for more than three decades, is cautious about the outlook.

"An agreement could be reached, but it could also fall apart now or at the very last moment. I would characterize this as a PR campaign and a way to delay the process. At the same time, the Catholic Church is trying to show that it is acting in good faith. Perhaps it will eventually reach an agreement with the victims' lawyers," he suggested.

The final settlement amount may be higher or lower.

Financial decisions of the archdiocese

To establish the fund, Cardinal Dolan announced a series of difficult financial decisions.

The archdiocese has cut its operating budget and laid off staff.

Last year, the archdiocese announced the sale of its former building at First Avenue and 56th Street. The sale is intended to "alleviate the financial burden created by the sexual abuse crisis." The building, which had served as its headquarters since 1973, was sold for approximately $100 million.

In the letter, Cardinal Dolan again acknowledged that child sexual abuse has brought "shame to the Church." Meanwhile, the victims emphasize that no amount of money can restore what has been lost.

"Any victim I've represented will say, 'If I had to choose between $1 billion and my childhood back, I'd choose my childhood,'" Garabedian said.

Another big case

The Archdiocese of New York's announcement came the same day a federal judge approved a settlement agreement for the Archdiocese of New Orleans, which will pay $230 million to hundreds of victims of clergy sexual abuse.

The Archdiocese of New Orleans filed for bankruptcy in 2020 to avoid having to handle each lawsuit separately.