Sacramento Diocese Considers Bankruptcy Over Sexual Abuse Claims

On Behalf of | Feb 28, 2023 | Catholic Church, Firm News

Sacramento Diocese Bankruptcy Horowitz Law

On February 26, 2023, Bishop Jaime Soto of the Sacramento Diocese revealed that the diocese is considering bankruptcy as it figures out how best to deal with hundreds of clergy sex abuse lawsuits.  There are currently more than 270 civil claims pending against the diocese. This figure includes both claims against the diocese for abuse by clergy and also claims related to Boy Scouts troops chartered by parishes in the diocese. The latest round of lawsuits, which are pending in a special proceeding in Alameda County, was filed after California legislation (AB 218) retroactively eliminated the statute of limitations for any claims of sexual abuse of a minor, regardless of how many decades ago the abuse occurred.

Bishop Soto wrote in a letter to parishioners that the diocese is facing “staggering” and unprecedented pressure from civil lawsuits that may result in significant financial impact to the diocese. Soto explains that while bankruptcy is a costly and lengthy process, “it provides a framework to bring all parties together under the supervision of the bankruptcy court to resolve claims with the bankruptcy court.” The Bishop said he is considering multiple financial options and expressed a desire to resolve claims brought by victim-survivors “in a fair and responsible manner.”  An alternative to bankruptcy may be a “workable claims resolution process,” according to the Bishop. Although the Bishop did not say that “bankruptcy” was imminent or even likely, the Bishop did say that the diocese must consider all its options in the event the diocese becomes insolvent, including the sale of real estate. The Bishop remarked that the diocese has “very little” insurance coverage to cover claims for prior decades.  The doicese issued a statement saying that the Vatican will not help pay these claims as they are an “independent entity.”  The diocese also said donations from its annual Catholic Appeal will not be used to pay these claims as they are “restricted funds.”  On the Sacramento Diocese website, it said a decision on filing bankruptcy will be made “over the next several months.”

The Sacramento Diocese encompasses parishes and other Catholic ministries in twenty northern California counties. Two other California Diocese has previously sought bankruptcy protection: San Diego and Stockton.  A third diocese, Santa Rosa, announced that it might be filing bankruptcy as early as March 2023. Attorney Adam Horowitz issued the following statement in response to Bishop Soto’s announcement:

“Bankruptcies by Catholic Diocese have become the latest way for Catholic Bishops to protect their assets and continue to cover up and conceal their wrongdoing. In bankruptcy, victims do not have an opportunity to “have their day in court” or confront wrongdoers and enablers.  Their claims become reduced to a financial transaction.  The notion that many of these Dioceses are “insolvent” is highly misleading in many cases. Dioceses across the country have been plotting for many years how they can conceal and artificially separate out their assets into the coffers of other related entities.  This is an abuse of the bankruptcy rules and process.”

Horowitz Law is a law firm representing victims and survivors of sexual abuse by Catholic priests and other clergy in the Diocese of Sacramento in California.  Our law firm has prepared and cataloged a comprehensive list of Diocese of Sacrament clergy accused of sexual abuse. If you need a lawyer because you were sexually abused by a priest in one of California’s Catholic dioceses, contact our office today. Although many years have passed, those abused by Catholic clergy in the Diocese of Sacramento have legal options. Our lawyers have decades of experience representing survivors of clergy sexual abuse in California and nationwide. We can help.

Contact us at 888-283-9922 or send an email to [email protected] to discuss your options today.