Archdiocese Files for Bankruptcy

ST. PAUL, Minn. (AP) — The Roman Catholic Archdiocese of St. Paul and Minneapolis filed for bankruptcy protection on Friday, saying it’s the best way for the church to get as many resources as possible to victims of clergy sexual abuse.

“We’re doing the right thing,” the Rev. Charles Lachowitzer told The Associated Press in an interview in advance of Friday’s filing in U.S. Bankruptcy Court. “This decision reflects the end of a process of putting victims first.”

The archdiocese is the 12th U.S. diocese to seek bankruptcy protection in the face of sex abuse claims. Church leaders have said for months that bankruptcy was an option, as the archdiocese faces numerous lawsuits by victims of clergy sex abuse. The lawsuits will be put on hold while the bankruptcy case is pending.

The filing estimates that the archdiocese, the largest in the state with more than 800,000 parishioners, has assets between $10 million and $50 million, with liabilities between $50 million and $100 million. It also estimated 200 to 300 creditors.

An attorney for the victims, Mike Finnegan, whose firm is working with the archdiocese as part of an October settlement on child protection issues, said the bankruptcy filing won’t stop scrutiny of the archdiocese.

“They’ve promised to treat victims fairly during this process,” he said Friday.
But Patrick Noaker, another victims’ attorney, said he’s disappointed. Noaker is handling a lawsuit scheduled for trial this month, and he said the bankruptcy filing robs him of the chance to reveal information that could help protect children in the future.

“The process of bankruptcy is not going to make kids safer,” he said. “I don’t think it’s any accident that they filed a week before this trial was going to start.”

Minnesota lawmakers created a three-year window in 2013 for victims of past sexual abuse to file claims that otherwise would have been barred by the statute of limitations.
Since then, the archdiocese has been sued roughly two dozen times, and it has received more than 100 notices of potential claims, according to Joe Kueppers, the archdiocese’s chancellor for civil affairs.

The mission of the church and its day-to-day operations will continue through bankruptcy, archdiocese attorney Charlie Rogers said. Parishes and schools, which are incorporated separately from the archdiocese’s central office, should not be affected.

“It’s a smart move on their part,” Pamela Foohey, an associate professor at Indiana University Maurer School of Law, said of the bankruptcy filing. “It ultimately can be useful for the victims taken as a whole, assuming that the diocese treats them fairly.”
Not all bankruptcy filings have gone smoothly. The Archdiocese of Milwaukee’s bankruptcy has dragged on for four years as attorneys fight over who should get paid and how much.

Finnegan, the victims’ attorney, said the process also will allow victims to look at the church’s finances, and gives the archdiocese and victims an opportunity to pursue insurance companies.

Lachowitzer said he hopes parishioners see the bankruptcy filing as necessary to move the archdiocese forward and close “a horrendous and tragic chapter in the life of the church.”