Stephen Trezza

Eight Catholic Dioceses have Filed For Bankruptcy Protection

In 2002, the Catholic diocese in Boston faced an enormous sex abuse scandal, during which its clergy were accused of countless instances of abuse. The allegations have forced the diocese into bankruptcy. Through the bankruptcy process, we have learned about the sheer number of allegations against the diocese, and against different dioceses around the country.

Eight dioceses have filed for bankruptcy recently: Boston, Massachusetts; Davenport, Iowa; Fairbanks, Alaska; Portland, Oregon; San Diego, California; Spokane, Washington; Wilmington, Delaware; and Tucson, Arizona.

When they filed for bankruptcy protection, as with any other case, anyone with a claim against the dioceses had a window within which to present their claim to the court and seek monetary compensation. This window permitted sex abuse victims a limited period of time within which they could bring allegations of the abuse against the Church. This has caused vast numbers of alleged victims to come out and bring claims.

In the other dioceses’ bankruptcies, the average number of claims was between 40 and 250. But in the Milwaukee, Wisconsin bankruptcy, more than 500 victims have come forth and made claims during the Milwaukee diocese’s bankruptcy case.

Although this number seems extremely high, experts predict the real number of victims is probably much higher because of the same involved in being a sex abuse victim and the pain of coming forward and drudging up past harms.

The payouts, if any, these victims receive will depend greatly on the “severity” of abuse, a difficult factor to quantify. The creditors have a unified committee, and the Archdiocese in Milwaukee will probably have to make one large payment to the group, which will be divided by the committee based on the factors it believes are appropriate.