NEW YORK – For the second time this month, a California diocese has announced that bankruptcy is possible as it figures out how to best address hundreds of clergy sex abuse lawsuits.
Bishop Jaime Soto announced Feb. 26 that the Diocese of Sacramento faces more than 200 lawsuits alleging the sexual abuse of minors, and that while nothing is set in stone, bankruptcy is one of multiple options being explored to adequately address the claims.
In a Diocese of Sacramento website Q and A page on the claims Soto explains that while bankruptcy is a costly and lengthy process, “it does provide a framework to bring all parties together under the supervision of the bankruptcy court to resolve claims with the resources available.”
The bishop noted that in the context of bankruptcy, victims of clergy sexual abuse would be represented in the proceedings, and a fund would be established to be distributed as fairly as possible. Whereas, he added, there’s concern that without such a process diocesan funds might be exhausted by the first cases that proceed to trial, leaving nothing for other victims.
The exact number of claims is unclear, as is what the potential cost could be. Whether the outcome is bankruptcy or another alternative, the diocese is working with the Alameda County Court to establish a resolution process. Soto said at this point it is still very early in the process.
“I am committed to resolving all claims as fairly as possible. Given the number of claims that have been presented, however, resolving them may overwhelm the diocese’s finances available to satisfy such claims,” Soto said. “The financial challenge is unlike anything we have faced before.”
“I must consider what options are available to us, should the diocese become insolvent,” he continued.
The 200-plus lawsuits stem from California legislation AB 218, which 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.
As a result of lawsuits stemming from the legislation, Cardinal Robert McElroy announced in mid-February that the Diocese of San Diego may have to file for bankruptcy to address around 400 clergy sex abuse lawsuits that could cost the diocese hundreds of millions of dollars.
Last week, lawyers for the victims sued the Diocese of San Diego, alleging in 2019 the diocese “fraudulently transferred real estate assets to parishes to avoid child sexual abuse claims;” assets that total more than $450,000,000. The diocese has since denied the allegation.
Also as a result of the California legislation, Bishop Robert Vasa announced in early December that the Diocese of Santa Rosa would file for bankruptcy as it faces more than 130 claims of clergy sex abuse.
Soto made it clear that the victims should not be blamed for the Diocese of Sacramento’s impending financial hardship. Instead, he highlighted on the Q and A page that “it is these evil acts that brought us to this place – not the victims of sexual abuse seeking justice.” He called the claims “heartbreaking.”
“Above all, I ask you to remain with me in prayer for the victims of sexual abuse,” Soto said.
“Remember at all times that the situation we face is due to the sins of our Church, not to victim-survivors seeking justice and healing,” he continued. “The relentlessness of the pain and suffering of these victims must be matched by the relentlessness of our prayers for their healing and by our efforts to never again allow these sins of sexual abuse to occur in the Church.”
Follow John Lavenburg on Twitter: @johnlavenburg
