By Jean Hopfensperger
Note: The following is an excerpt from an article first published January 16, 2015 by the Star Tribune.
The Archdiocese of St. Paul and Minneapolis filed for Chapter 11 bankruptcy protection Friday, saying it cannot meet its financial obligations from an unprecedented wave of clergy sex abuse lawsuits.
The move freezes lawsuits against the church, protecting the archdiocese from creditors while allowing it to develop a reorganization plan.
“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,” wrote Archbishop John Nienstedt on the archdiocese’s website Friday morning.
“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.”
Archdiocese officials have said such a move was a financial necessity, as it faced more than 20 lawsuits from people who charge they were sexually abused by priests. More than 100 other lawsuits are pending.
Church officials have scheduled a news conference for 2 p.m. Friday.
The bankruptcy filing does not provide precise figures on archdiocese finances. It showed estimated liabilities of $50 to $100 million, estimated assets of $10 to $50 million, and estimated creditors of 200 to 999.
All of the top 20 creditors listed in the filing are representatives of victims of clergy sex abuse, which is typical of church bankruptcy filings nationally.
Jeff Anderson, the St. Paul attorney handling most of the clergy sex abuse cases, said in a news conference Friday, “It is our belief that the action taken today is necessary.”
“We will do this in a way like it’s never been done before, and not fight and get involved in contention … but in the spirit of cooperation … and healing.”
Victim’s advocates charge that the move is one more example of the archdiocese shirking its responsibility to abuse victims.
“Why is it that when all the dioceses file bankruptcy, they do it on the eve of a trial?” asked Bob Schwiderski, longtime advocate for abuse survivors. “Is it because they can’t put their hand on the Bible and swear to tell the truth?”
Schwiderski was referring to three clergy abuse trials slated for Jan. 26, that will now be halted.
All cases and claims will be reorganized in bankruptcy court, Anderson said
“The good news is that the Archdiocese of St. Paul and Minneapolis has insurance and it has a lot of it,” he said.
“We and the archdiocese in the last weeks and months have tried to bring the insurance companies to the table,” Anderson said.
However, he said that has not succeeded. In November, it sued 20 insurance companies in federal court seeking to force them “to cover the type of injuries” suffered by the clergy abuse claimants.
Anderson said he thinks the archdiocese will prevail in the end.
The move is not expected to affect the roughly 200 Catholics parishes or Catholic schools, which are incorporated separately from the chancery.
Related Off-site Links:
Archdiocese Files for Bankruptcy Amid Abuse Claim Worries – Martin Moylan and Madeleine Baran (Minnesota Public Radio News, January 16, 2015).
St. Paul-Minneapolis Archdiocese Files for Bankruptcy – Amy Forliti (Associated Press via Crux, January 16, 2015).