Religion

/

Health

Tensions with insurers mount in Archdiocese of Baltimore bankruptcy case

Alex Mann, The Baltimore Sun on

Published in Religious News

BALTIMORE — Tensions are growing in the Archdiocese of Baltimore’s bankruptcy case around the role of the church’s insurers.

Baltimore’s arm of the Catholic Church, America’s oldest archdiocese, has sued its insurers for alleged breach of contract in one legal battle. In another argument, the insurers sought to block the committee of abuse survivors in the case from hiring certain experts, suggesting the diocese eventually could back out of bankruptcy.

The archdiocese’s lawsuit alleges its insurers are withholding information about insurance policies that could help cover sexual abuse claims filed in the bankruptcy case. The insurers have to cover at least some claims of child sexual abuse, the church says, but the companies have failed to acknowledge their responsibility to do so.

“The controversy is of sufficient immediacy and magnitude to justify the issuance of a declaratory judgment,” attorneys for the archdiocese wrote.

None of the insurance companies have responded to the lawsuit yet, but the litigation comes as the insurers put forth an argument in the case suggesting the bankruptcy may fall apart.

In filings earlier this month, three insurance companies said that the archdiocese should back out of bankruptcy depending on a forthcoming ruling from Maryland’s highest court on the constitutionality of the state’s Child Victims Act — an escalation of what is often a power struggle between insurance companies, the entity declaring bankruptcy and the people who have claims against that entity.

 

“My view of it is the insurance companies are saying ‘You want to fight? Alright, we’ll fight,’” Marie T. Reilly, a professor at Penn State Law who studies archdiocese bankruptcy cases, told The Baltimore Sun.

Maryland’s child victims law, which eliminated time limits for people sexually abused as children to sue their abusers and the institutions that enabled their torment, took effect Oct. 1. Anticipating hundreds of child sex abuse lawsuits that would be brought under a new state law, the archdiocese filed for bankruptcy Sept. 29.

While sex abuse complaints targeting churches, schools and correctional institutions flooded Maryland court dockets last fall, claims against the archdiocese had to be filed in the U.S. Bankruptcy Court in Baltimore. As of Wednesday, 170 of the so-called “proof of claim” forms had been filed, according to court documents. The deadline for survivors to file is May 31.

Insurers raised the prospect of the church backing out of bankruptcy in response to a March request from the creditors committee — seven survivors tasked with representing the interests of all victims in the bankruptcy proceedings — to hire experts to help evaluate sex abuse claims and determine how much money the insurance companies have to contribute to the bankruptcy.

...continued

swipe to next page

©2024 The Baltimore Sun. Visit at baltimoresun.com. Distributed by Tribune Content Agency, LLC.

Comments

blog comments powered by Disqus