San Francisco Archdiocese Files for Bankruptcy Citing 500 Sex Abuse Claims

The Roman Catholic Archdiocese of San Francisco has filed a voluntary petition for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy Code.

The church said the filing is necessary to manage the more than 500 lawsuits alleging child sexual abuse brought against it under California’s revised law that permits decades-old claims to be filed by December 31, 2022. These claims otherwise were previously time barred.

The church maintains that the “overwhelming majority” of the more than 500 claims stem from allegations of sexual abuse that occurred 30 or more years ago involving priests who are no longer active in ministry or are deceased.

The Chapter 11 filing will halt all legal actions against the church while the archdiocese develops a plan of reorganization that is based on assets and insurance coverage available to be used to settle claims with abuse survivors.

“The unfortunate reality is that the Archdiocese has neither the financial means nor the practical ability to litigate all of these abuse claims individually, and therefore, after much consideration, concluded that the bankruptcy process was the best solution for providing fair and equitable compensation to the innocent survivors who have been harmed,” said Reverend Salvatore J. Cordileone, Archbishop of San Francisco, in a statement.

California has twice amended its laws to allow time-barred or expired cases of child sexual abuse to be filed by alleged survivors. In 2003, California created a similar window. Since that time, the San Francisco church said it has paid more than $70 million to survivors in legal settlements by using insurance funds and selling excess property.

Cordileone said the filing is the “best way to bring much-needed resolution to survivors while allowing the Archdiocese to continue its sacred mission to the faithful and those in need.”

SNAP, the Survivors Network of those Abused by Priests, criticized the bankruptcy move:

“We seriously doubt that the Archdiocese of San Francisco does not have the assets to settle these lawsuits, and we find it disturbing that Archbishop Cordileone claimed this is the ‘best way’ for victims’ lawsuits to be resolved. We can only hope that the federal judge closely examines the Archdiocese’s real estate holdings, which are spread across three of the richest counties in the United States. We also hope that the judge will not be fooled by the fact that title to some property is held by churches, schools, or other Catholic entities. Should the Archbishop decide to liquidate those assets, the holder of the title will likely find themselves powerless to stop him.”

SNAP has also criticized the San Francisco church for not posting a list of abusers.

The Chapter 11 case has been filed in the U.S. Bankruptcy Court for the Northern District of California.

The 88 parishes within the archdiocese are independently managed and self-financed and, along with their parochial schools, are not included in the filing.

Of the 12 dioceses or archdioceses in California, there are two others that have fled for Chapter 11 in the face of sex abuse claims: Santa Rosa and Oakland. San Diego told a court in May that it would be filing soon.

The diocese of Stockton filed in 2014, and completed its process in 2017.

According to research by Marie T. Reilly, a professor at Penn State Law, as of July 2023, 34 Catholic religious organizations in the U.S. have sought bankruptcy protection in Chapter 11, with 24 having concluded. Eleven cases are pending.

According to the San Francisco diocese website, about 18 dioceses have resolved their bankruptcies and been able to successfully continue their ministries.

Photo: In this Oct. 4, 2012 file photo, Salvatore J. Cordileone stands during prayer during a ceremony to install him as the new archbishop of San Francisco at St. Mary’s Cathedral in San Francisco. (AP Photo/Marcio Jose Sanchez, Pool, file)

[inline-ad-2]