San Diego diocese files for Chapter 11 bankruptcy over clergy abuse lawsuits

The Jurist/February 28, 2007
By Brett Murphy

The Catholic Diocese of San Diego [official website] filed for Chapter 11 bankruptcy [petition, PDF] on Tuesday putting a stop to an upcoming sex abuse trial and becoming the largest US diocese to file for bankruptcy thus far. The diocese had been engaged in settlement talks with plaintiffs' attorneys in the lawsuits over clergy abuse [JURIST news archive], however, after those talks failed to come to any resolution, the diocese filed for Chapter 11 reorganization [SEC backgrounder]. As Bishop Robert Brom explained [statement], the diocese "decided against litigating our cases because of the length of time the process could take and, more importantly, because early trial judgments in favor of some victims could so deplete diocesan and insurance resources that there would be nothing left for other victims." David Clohessy, director of the Survivors Network of those Abused by Priests [advocacy website], told AP that the filing is not due to concerns for the victims, but rather "its for their own self-preservation."

The diocese told parishioners last week that it was considering declaring bankruptcy [JURIST report; PDF letter ] in light of the more than 140 pending lawsuits alleging sexual abuse by priests. In January 2007, the Catholic Diocese of Spokane [diocesan website] agreed to settle molestation claims [JURIST report] against priests for $48 million as part of its Chapter 11 reorganization plan [diocesan materials]. The Archdiocese of Portland filed for Chapter 11 [JURIST report] in 2004, and the dioceses of Tuscon, Spokane, and Davenport soon followed suit in the wake of hundreds of sexual abuse lawsuits [JURIST news archive] against clergy. Last month, the Portland archdiocese filed a new bankruptcy plan [JURIST report] including a $75 million settlement of the sexual abuse claims. AP has more. The San Diego Union-Tribune has local coverage.