Sex Abuse Cases Push Harrisburg Catholic Diocese into Bankruptcy

The Roman Catholic Diocese of Harrisburg, facing sex abuse claims it says it may not be able to pay, filed for bankruptcy protection, citing changing laws and an increasing number of victims.

The church “has struggled to remain financially viable while funding compensation for survivors and continued litigation by survivors,” the Pennsylvania diocese said in court papers filed Wednesday.

Early last year, church officials launched a compensation program for victims, giving them 90 days to file claims. The program paid more than $12.5 million to more than 110 victims, according to court papers.

Today, the diocese faces five lawsuits and potential claims from about 200 victims. Those cases and recent court rulings in the state court pushed the church to file the Chapter 11 bankruptcy case in federal court in Harrisburg, Pennsylvania, according to court papers.

In the last decade several Roman Catholic Dioceses have used bankruptcy to negotiate global settlements with victims, often by setting up trusts funded by local parishes, religious educational orders and insurance proceeds.

The Harrisburg diocese is organized into 89 parishes serving about 245,000 Catholics in Pennsylvania. The diocese’s debts include $30.1 million owed on a financing agreement arranged by PNC Bank. Its pension fund for retired priests is underfunded by about $26.5 million, according to court papers.

The case is Roman Catholic Diocese of Harrisburg, 20-00599, U.S. Bankruptcy Court, Middle District of Pennsylvania (Harrisburg).