San Diego Diocese files for bankruptcy

San Diego, Calif., Feb 28, 2007 / 08:08 am

Following a failed final attempt at settling clergy-abuse claims, the Roman Catholic Diocese of San Diego filed for Chapter 11 protection just before midnight last night, according to the San Diego Union Tribune.  The filing makes San Diego the largest of five U.S. dioceses to declare bankruptcy.

The diocese’s action halts the first of about 150 lawsuits alleging sexual abuse of children by 60 priests in incidents dating back decades.  The chain of lawsuits was set to begin today.

In a statement, Bishop Robert Brom said the goal of the filing was to allow for a fair dispersal of monies to all victims.  Brom said that despite the requests of a Los Angeles judge to stall the filing, it was necessary to take the step before the first case could begin, “because early trial judgments in favor of some victims could so deplete diocesan and insurance resources that there would be nothing left for other victims.”

Diocesan attorneys had met with Judge Anthony Mohr and attorneys of the plaintiffs on Monday to discuss a settlement.  Though he did not mention exact numbers, diocesan attorney Michael Webb said the diocese offered plaintiffs “a staggering amount of money,” which amounted to “the highest offer any diocese has made in terms of absolute dollars.”

“It was the final offer,” Webb said, “it was everything we were able to muster.”

“We put money on the table that would have stretched our financial capability to the limit,” Brom said in his statement, “but demands were made which exceeded the financial resources of both the diocese and our insurance carrier.”

In its brief electronic filing, the diocese said it had assets of more than $100 million, but estimated debts of more than $100 million.  The San Diego claims, dating back to the 1950s, could cost more than $200 million to settle, plaintiffs told the Union-Tribune.

The Bishop said that the diocese plans to present to the court, “an accurate statement on available diocesan assets and we will propose a comprehensive plan for compensating the victims and hearing their cases.”

At the same time, the bishop continued, “we will be disclosing the names of those accused…as well as the extent of their abuse, and we will verify that no known abuser is functioning in ministry.”

The diocese, he emphasized, will continue to “reach out with pastoral concern and care to victims of sexual abuse and their families, and to promote healing and reconciliation with them,”

The San Diego bankruptcy filings follow those of Dioceses of Tucson, Arizona; Spokane, Washington; Davenport, Iowa; and the Archdiocese of Portland, Oregon.

Tucson which filed for bankruptcy in 2004 has already emerged from its settlement, and settlement agreements in Portland and Spokane are awaiting final approval.