In 1640 Atherton was accused of buggery with a man, John Childe, his steward and titheproctor. Even though his fellow clerics attempted to prevent his trial to save the reputation of his Church, they were the first to have been tried under the law that Atherton himself had helped to institute. They were found guilty and both condemned to death, to the applause of the crowd, with Atherton being nearly lynched on his way to prison at Cork; Atherton was executed by hanging in Stephen's Green, Dublin, after reading the morning service for his cellmates. Reportedly, he confessed about the crime to the priest ministering him immediately before his execution, although he had proclaimed his innocence before that and kept doing so during the execution. Atherton was ironically the first to be executed for buggery in Ireland under the law he pushed to enact.
Since 1710, some historical evidence has been developed that shows Atherton might have been a victim of a conspiracy to discredit him and his patrons. This was attributable to Atherton's status as an astute lawyer, who sought to recover lost land for the relatively weak Protestant Church of Ireland during the 1630s. Unfortunately for Atherton, this alienated him from large landowners, who then allegedly used his sexuality to discredit him. The conspiracy has been alleged to have been led by a lawyer named Butler, over land in Killoges, near Waterfeld. Butler became insane after the execution, claiming to see Atherton at all time. English Puritan, Congregationalist and Independent activists, as well as English and Scottish Presbyterian activists, contemporaneously campaigned to abolish Episcopacy within the embattled Church of England, Church of Scotland and Church of Ireland; notionally expediting the political interest in Atherton's downfall. Posthumous accusations of sexual wrongdoing also include allegations of "incest" with his sister-in-law, and infanticide of the resultant child, as well as zoophilia with cattle. However, these allegations began to be circulated several months after his death in an anonymous pamphlet, and may have been intended to further discredit the bishop's campaign to restore the finances of the Church of Ireland.
Legends
A legend had him linked to the Old Mother Leakey, a Somerset ghost accused of shipwrecking. Another legend describes the house of Butler, the lawyer who allegedly led the conspiracy against Atherton, as being haunted by the ghost of the bishop.