Saying the move will help it to better atone for “the sins of the past,” the Roman Catholic Diocese of Harrisburg filed for Chapter 11 federal bankruptcy protection Wednesday, seeking financial breathing room as it deals with hundreds of complaints of child sex abuse by predator priests.
Diocese officials claim in the U.S. Middle District Court filing that they must erect that legal shield from creditors, including those who claim they were molested by priests as children, in order to continue acting as a religious and social welfare institution.
They say they are following the lead of other diocese across the nation that have been besieged by child sex abuse claims.
A widening of Pennsylvania’s legal window for prosecuting child-sex abuse claims and the reluctance and in some cases outright refusals of the diocese’s insurers to provide coverage for settlement payments of abuse claims is a driving force behind the Chapter 11 filing as well, diocese leaders say.
“A tragedy contrary to every teaching and tradition of the Roman Catholic Church has unfolded in the (church) as a whole and within the diocese in particular – that is, a small number of clergy and others took advantage of positions of trust and respect to sexually abuse children,” the Chapter 11 petition states. It adds that the diocese is “committed to providing for all survivors of abuse, known and yet to be known, in a fair, just and equitable manner.”
The diocese, which covers 15 counties and around 275,000 Catholics in central Pennsylvania, lists assets of between $1 million and $10 million and estimated liabilities of $50 million to $100 million. Its estimated creditors total from 200 to 999, the petition states.
In court filings, diocese officials list efforts they say they have made to date to compensate victims financially. More than $12.5 million worth of settlement agreements have been reached with about 110 priest abuse survivors to date, they state.
The diocese “has made – and continues to make – assistance to survivors and their families in their journey toward healing its top priority,” the petition states.
It states that the diocese is aware of five active civil lawsuits by clergy abuse survivors and that there are “approximately 200 survivors…associated with the” diocese.
Diocese officials say they have been “largely unsuccessful” in attempts to secure insurance coverage to pay claims. They vow to mount legal actions against their insurers after filing for bankruptcy in an effort to force insurance payouts.
At this stage, though, diocese faces the prospect of being hit with claims “exceeding (its) economic ability to pay,” the petition states.
Such a scenario would not only short-change some abuse survivors financially, but could cripple the diocese’s ability to maintain the spiritual and social programs for the tens of thousands of Catholics and non-Catholics who need that support as a “necessary, stable and enriching element in their lives,” diocese officials contend.
Approval of the Chapter 11 request would give the diocese protection from their creditors, including those with unresolved clergy sex abuse claims, along with breathing space to pursue financial reorganization.
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