ALBANY (NY)
Times Union [Albany NY]
July 28, 2024
By Raga Justin
At least two foster care organizations have filed for bankruptcy as they attempt to honor claims made under the Child Victims Act. Others worry they are next.
The labyrinthine rooms of the Northern Rivers foster care facility in Albany appear sterile at first glance.
But the 24 children living full-time in the building, just a stone’s throw from the Albany Medical Center complex, have marked their surroundings with personal possessions — K-pop posters, treasured photographs, clothes and shoes spilling out of cupboards. The dorm-like bedrooms are occupied by kids who have become Northern Rivers residents for a singular reason: they need a place to stay and to get care as they churn through the Capital Region’s foster care system and await a more permanent solution.
On a pleasant summer day in July, the grounds are bustling. Children play rowdy card games or cool off in a private pool while accompanied by staff workers. A kickball game against the Albany Police Department has been scheduled for later this summer; trips to see the New York City Rockettes and visits to the Yankee Stadium and MetLife Stadium in New Jersey punctuate schoolwork and counseling sessions.
These excursions have long been considered essential parts of childhood at Northern Rivers, which has sought to position itself as an oasis amid often fraught family life, said William Gettman, the facility’s director.
But as foster care agencies brace for settlements arising from the landmark Child Victims Act, which temporarily lifted the statute of limitations and allowed thousands of survivors of childhood sexual assault to sue their alleged abusers or the institutions that enabled them, Gettman and others fear the stark financial hit that multimillion-dollar payouts would have on their assets.
Foster care agencies and advocates have taken those concerns to lawmakers and Gov. Kathy Hochul’s administration, noting that organizations do not have the cash on hand to settle with plaintiffs whose cases often date back decades, sometimes predating valid insurance claims. If they are forced to pay, these organizations say their own operating budgets would take a direct hit — even as they provide the services fulfilling New York’s statutory obligation to care for children removed from homes where they allegedly have suffered neglect or abuse.
Over 800 cases under the Child Victims Act have been filed against private foster care agencies, according to the Council of Family and Child Caring Agencies (two-thirds are in New York City). In nearly 40 percent of those cases, the insurance claim at the time has been voided, members reported.
Northern Rivers has 11 cases pending against it under the law, on average dating back at least 30 years, Gettman said. Viable insurance claims that would cover the time period in question have proven elusive.
If the agency is responsible for even a few settlements worth $1 million, he said their operational budget would take a significant hit. Any financial liability could signal the loss of all the “bells and whistles” — such as special activities and birthday parties for every child — that Northern Rivers has long provided.
But it could also mean cutting back on programming, ranging from mental health and medical services to vocational training for children about to age out of the system. The fallout could additionally include slashing salaries, or even staff — at a time when New York’s social services system continues to stuggle.
“The sins of the past need to be reconciled,” Gettman said. “But I don’t think we should be paying for them.”
Balancing act
Already, at least two foster care organizations have filed for bankruptcy and undergone financial restructuring as they attempt to honor claims made under the Child Victims Act.
St. Christopher’s Inc., a child care charity based in Westchester County, filed for bankruptcy in April and is undergoing financial restructuring — a predicament due largely to more than two dozen Child Victims Act cases, according to Executive Director Sarah Ruback.
“The already-delicate financial situation of St. Christopher’s was overwhelmed by the CVA litigation that impacted our agency and many others in New York,” Ruback said. “We are hopeful that a successful restructuring will allow us to reset our financial footing to preserve St. Christopher’s mission to help children and youth with special needs for years to come.”
And on Long Island, the nonprofit Timothy Hill Ranch declared bankruptcy last October after falling nearly $5 million in debt. It ultimately settled for $1.7 million with three former residents who alleged they were sexually abused at the facility.
Many Child Victims Act cases have been filed against large institutions that have been accused of covering up and mishandling sexual abuse cases, including the Roman Catholic Church and the Boys Scouts of America. Many public school districts in New York have also faced litigation under the Child Victims Act, as well as foster care agencies responsible for housing children already made vulnerable by difficult family circumstances or mental health issues.
The law enabling a one-year suspension of the normal statute of limitations went into effect in 2019. It was later extended another year as the pandemic paralyzed court systems. Five years later, thousands of cases have yet to reach resolution, though settlements have begun to trickle in.
New York’s child welfare system is heavily decentralized, meaning each county operates its own Child Protective Services agency. Government workers, tasked with removing children from their homes when there are sustained neglect or abuse allegations, are then legally responsible to assume full responsibility over those children. To fulfill that mandate, they rely overwhelmingly on private organizations such as foster care agencies, often funded through public sector contracts.
That reliance could backfire if the foster care system collapses, said Kathleen Brady-Stepien, director of the Council of Family and Child Caring Agencies.
Brady-Stepien and others have lobbied lawmakers on possible solutions, including a $200 million Child Victims Act Fund that ultimately failed to gain traction in the state Legislature. Lawmakers balked at adopting a fund that some positioned as an escape from culpability and, ultimately, true justice.
Brady-Stepien emphasized that agencies are cognizant of the need to provide justice for survivors, but said that as long as foster care agencies teeter on the edge of bankruptcy, the chances of payouts for victims become slimmer.
“What we really want the state to do is to help us make sure that survivors have the ability to be compensated,” Brady-Stepien said. “How fast is that court calendar going to move, versus how quickly can we achieve a solution that doesn’t involve all these bankruptcy filings and chaos, and the risk of survivors not being able to access justice?”
Raga Justin is an investigative reporter covering politics and policy with the Capitol Bureau, where she was previously a Hearst fellow. She is a native Texan and University of Texas at Austin graduate and has worked for the Hearst Connecticut Media Group, the Dallas Morning News in Washington, D.C., and the Texas Tribune. Send tips, feedback or rants to raga.justin@hearst.com.