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Dioceses are filing for bankruptcy due to volume of sexual abuse cases

Lawmakers are trying to remove statutes of limitations for child sexual abuse cases, possibly opening up more cases that churches can't afford.
Posted at 9:13 PM, Apr 10, 2023

As lawmakers from Maryland to California work to repeal statutes of limitations on childhood sexual abuse claims, Catholic churches taking floods of accusations are falling into financial ruin.

Five of New York state's eight Catholic dioceses have filed for chapter 11 bankruptcy, and in California, the diocese of Santa Rosa filed for bankruptcy last month. The Roman Catholic Diocese of San Diego is considering the same move, though church leaders in San Diego don't plan to decide until summer.

However, that decision would be considered an insult by some survivors, like Anthony DiMaggio.

"Really I feel it's like a slap in the face," DiMaggio told Scripps News San Diego. "It's kind of without any warning."

DiMaggio, now 59 years old, says he was first abused when he was just 10.

"It really had a horrible effect, I think, most of my life, feeling guilty and just kind of carrying it around," he said.

His lawyer, Irwin Zalkin, represents 120 survivors. Zalkin balks at the diocese's consideration of chapter 11 protection.

"Bankruptcy is designed to protect the assets of a debtor from their creditors, and these survivors are creditors," Zalkin said.

Newly ordained Bishop Edward B. Scharfenberger, left, and Cardinal Timothy Dolan.

Another New York diocese files for bankruptcy amid wave of lawsuits

Of New York's eight dioceses, Albany is the fifth to file for Chapter 11 bankruptcy amid accusations of sexual abuse.


But Marie T. Reilly, a law professor at Penn State, sees it differently. She's spent years studying the ballooning of abuse claims against the Catholic Church and the resulting financial havoc that follows.

"Bankruptcy is not necessarily a bad outcome for people who want compensation for injuries that they claim to have experienced," Reilly said. "In a bankruptcy case, you file a one-page document, a proof-of-claim form. You put your name on it. You're entitled to submit the form out of the public record, completely confidentially."

The alternative, she explained, puts the burden of proof on the survivor to show they are entitled to compensation, and could take more time as courts process thousands of claims.

Catholic church in Baltimore, Maryland

Sex abuse survivors seek vindication following Baltimore church probe

The legal path forward for survivors of sex abuse within the Archdiocese of Baltimore could look different for each individual.


In Maryland, where a recently released attorney general's report accused the Archdiocese of Baltimore of covering up hundreds of cases of abuse over decades, lawmakers have passed a bill removing the statute of limitations on childhood sexual abuse claims. Lawmakers in California are considering a bill that would do the same. Each move has the potential to open the floodgates for abuse claims.

"I guess it's fair to call it an industry," Reilly said, recounting how litigating abuse claims has changed since the first major case against former clergy more than 20 years ago. "There are plaintiffs' lawyers who are specialized in sex abuse cases. They are extremely well organized, well funded."

The diocese in San Diego filed for bankruptcy once before in 2007. At that time, it was the largest diocese in the country to do so.

In a statement, the diocese of San Diego said if it files for bankruptcy again, the move "would provide a pathway for ensuring that the assets of the diocese will be used equitably to compensate all victims of sexual abuse, while continuing the ministries of the Church for faith formation, pastoral life and outreach to the poor and the marginalized." It went on to say, "[Bankruptcy] would also provide a fund for future claimants of sexual abuse who have not filed a claim. Finally, bankruptcy would provide a conclusion to the tide of lawsuits covering alleged abuse as long as 75 years ago."

"To try to make it, spin it, as somehow in the best interest of survivors is nonsense," Zalkin said.

Still, Reilly thinks bankruptcy filings could ultimately lead to higher payouts for victims, since bankruptcy opens a diocese's assets to scrutiny and potential reapportionment.

"The worst place to hide, if you're interested in hiding, is in a bankruptcy case," she said.