San Diego Catholic diocese may file bankruptcy in light of lawsuits

By Sarah Lizee

Olympia, Wash., Feb. 10 – The Roman Catholic Diocese of San Diego is considering filing for bankruptcy to provide a pathway compensating victims of sexual abuse, according to a statement issued Friday.

Three years ago, the California state legislature lifted the statute of limitations for lawsuits regarding the sexual abuse of minors. Following this change in the law, the diocese has received about 400 suits seeking monetary damages.

In 2007, the diocese paid out $198 million to settle 144 claims of abuse that been brought during an earlier lifting of the statute of limitations. This depleted most of the assets of the diocese.

The diocese said that even with insurance, it won’t be able to pay out similar sums now, and it may file a bankruptcy petition in the coming months.

“Bankruptcy 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,” cardinal Robert McElroy said in the statement.

“It would also provide a fund for future claimants of sexual abuse who have not filed a claim.”

The parish assets have been held in recent years by individual parish corporations, and before that they were held by the diocese in trust for each particular parish community. Almost without exception in other diocesan bankruptcies, parish assets have remained separate.

At the same time, parishes in a diocese undergoing bankruptcy typically contribute some limited monies to the funds for claimants.

The Roman Catholic Diocese of San Diego was established in 1936. The diocese includes 98 parishes and 89 schools.

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