Diocese of San Diego to file for bankruptcy for the second time
NEW YORK – With the Diocese of San Diego facing about 450 lawsuits over alleged sexual abuse of minors by priests, religious, and laity, Cardinal Robert McElroy has informed the clergy and faithful that today the diocese will file for bankruptcy for the second time.
The announcement comes about 16 months after McElroy said the diocese was considering the move.
“For the past year, the Diocese has held substantive and helpful negotiations with attorneys representing the victims of abuse, and I, in collaboration with the leadership of the Diocese, have come to the conclusion that this is the moment to enter formally into bankruptcy and continue negotiations as part of the bankruptcy process,” McElroy said in a June 13 letter.
McElroy explained that bankruptcy offers the best pathway for the diocese to both justly compensate victims of sexual abuse, and to “continue the church’s mission of education, pastoral service and outreach to the poor and the marginalized.”
McElroy added that filing for bankruptcy provides a framework to achieve equity among the differing claims of victims, and also establishes a fund to compensate past victims of sexual abuse who come forward in the future. Further, McElroy said the move “will achieve a definite conclusion to its legal liability for past claims of sexual abuse” through the eventual bankruptcy settlement.
Despite the challenges ahead for the diocese, McElroy made clear that only the church is to blame.
“As we move through this difficult process during the coming year, it is essential that we all keep in mind that it was the moral failure of those who directly abused children and teenagers, and the equally great moral failure of those who reassigned them or were not vigilant, that led to the psychological and spiritual wounds that still crush the hearts and souls of so many men and women in our midst,” McElroy said.
“The tremendous strides we have made in the past twenty years to protect minors in the Church and beyond cannot begin to mitigate the enormous moral responsibility that I, as your bishop, and the entire Catholic community continue to bear,” he added.
Lawyers for the survivors, meanwhile, have said the diocese’s bankruptcy filing is an attempt to avoid “paying fair compensation to child sex abuse victims.”
“After nearly a year of mediation, we were hoping that child sexual abuse survivors, the Diocese and its insurer would have been able to reach a settlement and an agreed to plan for compensating victims through the inevitable bankruptcy announced by the Diocese about a year ago,” Irwin Zalkin, an attorney for the Zalkin Law Firm who is counsel for the claimants. “Unfortunately, that hasn’t happened.”
“It has become very clear that these Catholic Dioceses and their insurers have adopted a national strategy to use Chapter 11 bankruptcies to resolve child sexual abuse cases in a way that reduces the compensation paid to survivors and deprives survivors of their right to trial,” Zalkin continued.
Zalkin added that the efforts are a “misuse of the bankruptcy system.”
The approximate 450 lawsuits against the Diocese of San Diego stem from California legislation AB 218, a 2019 law that eliminated the statute of limitations for any claims of sexual abuse of a minor for three years, from Jan. 1, 2020 to Dec. 31, 2022.
The diocese has already paid $198 million to settle 144 claims of abuse in 2007, stemming from an earlier lifting of California’s statute of limitations, which McElroy has previously said “depleted” most of the diocese’s assets. If the numbers with the present lawsuits are similar to those of 2007, the diocese’s payout to survivors could be in the neighborhood of $500-$600 million.
In the June 13 letter, McElroy said that while only the diocese will be filing for bankruptcy both diocesan parishes and high schools will have to “contribute substantially to the ultimate settlement in order to bring finality to the liability they face.”
The Diocese of San Diego is the sixth California diocese to file for bankruptcy.
The most recent was the Diocese of Fresno, which filed for bankruptcy last month as it faces 154 child sex abuse lawsuits. The other four California dioceses that have filed for bankruptcy are the Archdiocese of San Francisco, and Dioceses of Sacramento and Oakland.
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