Catholic dioceses across the United States are considering or already taking steps toward declaring bankruptcy (Chapter 11), partly in response to a flood of sexual abuse lawsuits filed after states adopted laws that eliminate or pause statutes of limitations. According to one researcher, 32 Catholic dioceses and religious orders have sought or emerged from bankruptcy since 2001, when the extent of the clergy sexual abuse crisis became more widely known. It's like there's some secret public relations playbook passed to every US Catholic official. And under the tab titled "Seeking bankruptcy protection," the first bit of advice (i.e., 'spin') is something like: "Always claim - and relentlessly repeat - that you're doing this to be FAIR to the victims."
Look at what Ogdensburg, New York Bishop said when he filed paperwork just two weeks ago to seek Chapter 11 protection: "The diocesan bankruptcy establishes a process for all claims to be treated fairly."
- Three years before, in 2020, New Orleans Archbishop Gregory Aymond said essentially the same thing: "This path (bankruptcy) will allow clergy abuse victims to resolve their claims in a fair and timely manner."
- Now look at what the first US bishop said when he filed for Chapter 11 protection. In 2004, Portland, Oregon's Archbishop John Vlazny declared bankruptcy and stated, "It is, in fact, the only way I can assure that other claimants can be offered fair compensation."
We at Horowitz Law have not done this, but we suspect that if one were to do a quick Google search of the roughly 20 other Catholic dioceses and religious orders who have sought or now seek Chapter 11 protection from the federal government, nearly identical language would be found. Check out this comprehensive list of all dioceses that filed for bankruptcy.
But here's a question worth considering: Since when have US bishops really been focused on compensating victims fairly? When a single Pennsylvania court ruling tossed out 150 clergy sex abuse cases in one fell swoop, every one of those victims got NOTHING. Do you recall seeing any Catholic official anywhere jump up and shout, "That's not fair! Victims in other states sometimes get six-figure settlements while these 150 Pennsylvania victims get nothing!" Nope. No one saw anything of the sort.
When a Catholic religious order or diocese wins a 'motion to dismiss' in a clergy sex abuse and cover-up case, they get that victim's case thrown out of court because of a legal technicality. Do you remember seeing any Catholic official anywhere crying out, "But a victim in other jurisdictions IS able to pursue her cases in court, while this victim gets the courthouse door slammed in their face? That's not fair!" Remember that church officials do this to try their best to exploit any legal loophole they can find or create to get abuse lawsuits rejected shortly after they are filed in virtually every single instance. They have been doing so for decades.
But there is one party in bankruptcy proceedings: Catholic officials. In every Chapter 11 case, Catholic officials:
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- Get an immediate and indefinite HALT to all clergy abuse and cover-up lawsuits.
- Get to stop worrying about juries being shocked by the recklessness, callousness, and deceit they and their predecessors have engaged in and end up awarding millions to still-suffering survivors.
- Get an immediate and indefinite HALT to all clergy abuse and cover-up discovery, including depositions and document releases.
- Get a 'bar date,' a deadline by which all victims must file a 'claim' or else risk getting ZERO when the process finally ends (usually years later).
- Get tremendous public relations boosts and benefits, the media coverage and public attention suddenly shift from "Who committed and concealed all these heinous crimes against kids?" to "Gee, is this diocese (or religious order) really broke?"
- Church staff and members begin to spend less time and energy asking, "I wonder if I know any of the victims?" or "I wonder if any of the priests I know did any of these crimes or cover-ups?" and more time and energy asking "Is my parish/school/favorite church program going to have to close?" or "Will my donations go to pay a bunch of expensive lawyers?"
- The church hierarchy gets a reprieve from news story after news story about lawsuits, legal motions, court dates, and often critical editorials, columns, and letters to the editor blasting church officials and diocesan defense lawyers for mean-spirited and hardball legal tactics.
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Just to be clear: These 'benefits' are provided 'fairly' to ALL Catholic officials - cardinals, archbishops, bishops, vicar generals, chancellors - in all Catholic jurisdictions - in dioceses and religious orders large and small. If you're still wondering who benefits most from church bankruptcies, keep two simple facts in mind. When an institution files for bankruptcy, the formal phrase for that move is 'seeking Chapter 11 protection." And the institution that seeks that protection, in this case, the Catholic entity, wants that protection for itself, not those in pain.
Lawyers and advocates for survivors say that dioceses seeking bankruptcy protections use the process to shield church assets from individuals who were harmed by the church, by, for example, moving around funds or real estate holdings. In its statement, SNAP said the "proposed bankruptcy strategy would restrict a victim's ability to obtain compensation and, more importantly, would bar them from obtaining the Bishop's confidential records, which would reveal the scope of previous and present cover-ups."
Horowitz Law is a law firm representing victims and survivors of sexual abuse by religious authority figures and other clergy. If you need a lawyer because a member of a religious organization sexually abused you, contact us today at 888-283-9922 to discuss your options today. Our lawyers have decades of experience representing survivors of clergy sexual abuse nationwide. We can help.