Clergy Sex Abuse Lawsuits Too Expensive: Archdiocese Seeks Bankruptcy Protection

A wave of clergy sex abuse lawsuits has prompted one archdiocese to seek Chapter 11 bankruptcy protection because it can’t “meet its financial obligations,” the Star Tribune reports.

Archbishop John Nienstedt, of the Archdiocese of St. Paul and Minnesota, posted to the group’s website on Friday morning.

“I make this decision because I believe it is the fairest and most helpful recourse for those victims/survivors who have made claims against us,” he said.

“We continue to facilitate the healing process for this local church” to restore confidence in the church, he added later at a press conference, noting “Obviously, we have a long journey ahead of us.”

As a result of the bankruptcy, the Archdiocese will have all lawsuits against it frozen, and the church will be protected from creditors as it undergoes a reorganization plan.

“Reorganization will allow the finite resources of the Archdiocese to be distributed equitably among all victims/survivors… It will also permit the Archdiocese to provide essential services required to continue its mission within this 12-county district.”

The Archdiocese at the center of the clergy sex abuse scandal faces more than 20 lawsuits from people who say they were sexually abused by priests and more than 100 additional lawsuits are pending. While the filing doesn’t provide exact numbers, the church shows liabilities of $50 to $100 million, with estimated assets of $10 to $50 million. Its estimated creditors are between 200 and 999.

While Jeff Anderson, a St. Paul attorney handling the majority of the clergy sex abuse cases, agreed with the bankruptcy filing, calling it “necessary,” advocates for some of the victims were infuriated.

“Why is it that when all the dioceses file bankruptcy, they do it on the eve of a trial?” said Bob Schwiderski, advocate for abuse survivors.

“Is it because they can’t put their hand on the Bible and swear to tell the truth?”

The St. Paul/Minnesota bankruptcy will be the 12th filed by U.S. archdioceses and dioceses since the Archdiocese of Portland filed in 2004, the Star Tribune noted.

Portland reached a settlement of $90 million to 171 survivors and their attorneys. The Diocese of Wilmington, Delaware, paid $77 million to 150 survivors and their attorneys.

Each of the bankruptcies was sparked by clergy sex abuse lawsuits.

The St. Paul/Minnesota bankruptcy is expected to take two years to complete.

Nienstedt confirmed the church may have to sell some assets, but that parishes should be unaffected by the bankruptcy. He also hoped for “continued donations from parishioners” and asked for those at the Friday press conference to “keep me in your prayers, as well as this archdiocese.”

Investigations of wrongdoing against Nienstedt are still pending. He said that he would not resign.

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