ST. PAUL, Minn. – The Roman Catholic Archdiocese of St. Paul and Minneapolis filed for bankruptcy protection on Friday, saying it’s the best way for the church to get as many resources as possible to victims of clergy sexual abuse.
“We’re doing the right thing,” the Rev. Charles Lachowitzer told The Associated Press in an interview in advance of Friday’s filing in U.S. Bankruptcy Court. “This decision reflects the end of a process of putting victims first.”
The archdiocese is the 12th U.S. diocese to seek bankruptcy protection in the face of sex abuse claims. Church leaders have said for months that bankruptcy was an option, as the archdiocese faces the potential for dozens of lawsuits by victims of clergy sex abuse. Those lawsuits would be put on hold while the bankruptcy case is pending.
The filing estimated the archdiocese’s assets between $10 million and $50 million, with liabilities between $50 million and $100 million. It estimated 200 and 300 creditors.
Minnesota lawmakers created a three-year window in 2013 for victims of past sexual abuse to file claims that otherwise would have been barred by the statute of limitations.
Since then, the archdiocese has been sued roughly two dozen times, and it has received more than 100 notices of potential claims, according to Joe Kueppers, the archdiocese’s chancellor for civil affairs. It’s unknown how many of those notices will develop into lawsuits before the window expires in May 2016.
Charlie Rogers, an attorney working for the archdiocese, said the mission of the church and its day-to-day operations will continue through bankruptcy. Parishes and schools, which are incorporated separately from the archdiocese’s central office, should not be affected.
Rogers said Thursday that it was premature to discuss the archdiocese’s potential assets and that those would be outlined in court documents in coming weeks.
Pamela Foohey, an associate professor at Indiana University Maurer School of Law, said filing for bankruptcy can be a smart move and ultimately help victims – as long as they are treated fairly.
Not all bankruptcy filings have gone smoothly.
The Archdiocese of Milwaukee’s bankruptcy has dragged on for four years as attorneys fight over who should get paid and how much. But in Montana, the Roman Catholic Diocese of Helena sought protection only after working out a deal with victims beforehand – that deal was approved by a judge earlier this week.
The St. Paul-Minneapolis archdiocese does not have a pre-packaged plan for reorganization, but the archdiocese will try to avoid prolonged fights seen in other dioceses, Rogers said.
The archdiocese has already addressed issues that have bogged down other bankruptcies, including implementing a new system to protect children and disclosing thousands of pages of church documents and the names of accused priests. As a result, Rogers said this bankruptcy can focus purely on financial restitution to victims.
Lachowitzer said he hopes parishioners see the bankruptcy filing as necessary to move the archdiocese forward and close “a horrendous and tragic chapter in the life of the church.”
