Diocese of Wilmington reluctantly files for bankruptcy

Wilmington, Del., Oct 19, 2009 / 21:57 pm

The Diocese of Wilmington, Delaware has announced that it has filed for bankruptcy, in part because of the expenses incurred in paying lawsuits by the victims of clerical sexual abuse. Bishop of Wilmington W. Francis Malooly called the move a “painful decision” he had hoped and prayed to avoid.

After consultation with advisors and experts, Bishop Malooly said in a Sunday letter, he came to believe the diocese had no other choice. Filing for bankruptcy “offers the best opportunity, given finite resources, to provide the fairest possible treatment of all victims of sexual abuse by priests of our Diocese.”

“The Chapter 11 filing is in no way intended to dodge responsibility for past criminal misconduct by clergy – or for mistakes made by Diocesan authorities,” Bishop Malooly’s letter read. “Nor does the bankruptcy process enable the Diocese to avoid or minimize its responsibility to victims of abuse. Instead, the Chapter 11 filing will enable the Diocese to meet its obligations head-on and fulfill its responsibility to all victims.”

“My decision to file for Chapter 11 reorganization also was agonizing because it meant that, apart from the psychological and spiritual toll on the abuse victims, there will be significant financial losses for creditors who have faithfully supported us for years. The possibility of such losses has been present from the time that the scope of the claims against us first became clear, but the filing unfortunately makes it a certainty.”

Bishop Malooly reported that parishes, schools or related church organizations have their own corporate identities and will not be reorganized under Chapter 11 bankruptcy.

“It is our moral obligation to make reparations and otherwise see to the healing of legitimate abuse victims and to try to restore the faith that in many cases has tragically been lost. But our moral obligations do not end there. We also are obliged to continue our charitable, educational and spiritual missions and the ministries associated with them.”

More than 20 Delaware plaintiffs have filed lawsuits against former priest Francis DeLuca, who has been jailed in New York for repeatedly molesting his grandnephew.

The diocese has paid more than $6.2 million since 2002 to settle sexual abuse lawsuits. It has also paid settlements to alleged victims who did not file suits.