Oakland Diocese considers filing for bankruptcy with 330 abuse lawsuits pending

Denver, Colo., Mar 21, 2023 / 08:56 am

The Catholic Diocese of Oakland is considering filing for bankruptcy as it prepares to respond to hundreds of lawsuits concerning decades-old sex abuse incidents in what the local bishop called a “monumental challenge.”

“Since the closing of the filing window on Dec. 31, 2022, we have been informed there may be approximately 330 lawsuits filed against our diocese,” Bishop Michael Barber, SJ, said in a March 16 letter to parishioners and friends of the Diocese of Oakland. “As the court continues to process the lawsuits, the total magnitude will become clearer. However, it is increasingly evident we face a monumental challenge.”

“I want to let you know the diocese is giving strong consideration to filing for Chapter 11 bankruptcy,” the bishop said. “After much prayer and thoughtful advice, I believe bankruptcy can provide a way to support all survivors in their journey toward healing in an equitable and comprehensive way. It will also allow the diocese to reorganize our financial affairs so we may continue to fulfill the sacred mission entrusted to us by Christ and the Church.”

The state of California passed legislation that grants a three-year exemption to the statute of limitations on sexual abuse lawsuits. The legal window began Jan. 1, 2020, and ended Jan. 2, 2023.

Though the diocese believes there may be about 330 lawsuits pending, only three of the filed lawsuits concern incidents alleged to have taken place in the last two decades, the Oakland Diocese said on its website.

“Most claims are about abuse that allegedly occurred in the 1960s, 1970s, or 1980s,” the Oakland Diocese said on its website. “Almost every case relates to abuse alleged to have occurred prior to 2003.”

The late Bishop Floyd Begin, who became the first bishop of the Diocese of Oakland in 1962, is among the newly accused, NBC Bay Area reported in February. A December 2022 lawsuit accuses him of sexually abusing a 12-year-old girl once in 1968. Begin, a former auxiliary bishop of Cleveland, died in 1977 at the age of 75.

“While these are ‘old’ cases, for some survivors of abuse, the pain of abuse does not subside and can be as immediate as when the abuse occurred. They are not at fault,” the diocese said. “Those individuals who perpetrated these grievous sins and crimes brought us to where we are today.”

The Oakland Diocese website lists 65 “credibly accused” priests, deacons, and vowed religious. It lists 21 Oakland Diocese priests, 36 priests and deacons from other dioceses or from religious orders, and eight religious brothers who lived in the diocese.

The recent lawsuits contain accusations against more than 30 members of the clergy who are not on the list, according to NBC Bay Area News. Some alleged abusers in the lawsuits are lay church employees, including teachers and coaches, and a handful of nuns.

Barber said he has been working with the diocese’s College of Consultors, its finance council, and other staff and advisers to “discern the best way to support compassionate and equitable compensation for survivors and ensure the continuation of vibrant, Christ-centered parishes to serve our faithful.”

He noted that the lawsuits will directly impact the diocese’s reorganization effort, called the Mission Alignment Process, which aims to respond to declining Mass attendance, baptisms, vocations to the priesthood, and other changes.

Barber characterized the possible bankruptcy decision as “an important moment in our journey toward rebuilding Christ’s Church.” He asked parishioners and friends of the Oakland Diocese for their support.

“In this Lenten season, let us pray for one another, that we may embrace God’s redemptive love. Mindful that he has promised to remain with his Church forever, we seek his divine mercy and take comfort in the sure promise of Christ’s resurrection.”

The diocese said it is likely that it does not have enough funds to address all the legal claims and legal costs. It has limited cash reserves and insurance could cover the costs of some claims, as could the sale of underused, noncritical assets.

There is no deadline for a bankruptcy decision. If the diocese files for bankruptcy, most daily operations of the diocese, its parishes, and its schools will not change.

The diocese rejected the idea that bankruptcy is a way to minimize its responsibilities to abuse survivors. A Chapter 11 filing will allow all claimants “equal access and an equitable share in the assets available to pay claims,” working through a court-sanctioned, public, and transparent process.

The Diocese of Oakland stressed its efforts to safeguard children and vulnerable adults through education, prevention training, and screening of clergy, employees, and volunteers.

California’s window for sex abuse lawsuits has affected other Catholic dioceses. In February, Cardinal Robert McElroy of San Diego announced that his diocese could have to resort to a declaration of bankruptcy in 2023 to manage the cost of hundreds of new abuse claims.

Earlier this month California’s smallest diocese, the Diocese of Santa Rosa, said it intends to file for bankruptcy. The diocese said at least 160 claims had been filed against it, with more than 200 possible. More than 115 cases concern incidents dating back more than 30 years, and some more than 60 years ago.

More than two dozen U.S. dioceses, including two in U.S. overseas territories, have entered into bankruptcy proceedings, the vast majority in the past decade. California’s Diocese of Stockton went through a three-year bankruptcy period from 2014 to 2017.