BALTIMORE -- Facing a mountain of potential lawsuits connected to its history of child sexual abuse committed by priests, America’s oldest Catholic archdiocese declared bankruptcy Friday, a move designed to limit its liability against potential damages and conserve its assets.
The bankruptcy petition, filed in federal bankruptcy court in Baltimore, was not unexpected. Archbishop William E. Lori, the highest-ranking Catholic cleric in Maryland, sent a letter Sept. 5 to the more than 500,000 Archdiocese of Baltimore parishioners saying the church was considering such a step.
The church acted as Maryland’s newly passed Child Victims Act is set to go into effect Sunday. The law, which the legislature passed in April over the objection of the church and other organizations, will remove a statute of limitations on when childhood sexual abuse victims may sue perpetrators.
Declaring bankruptcy is the latest legal countermove from the archdiocese since the Maryland Attorney General’s Office completed a four-year investigation of childhood sexual abuse in the church last year. The archdiocese paid for attorneys in Baltimore to fight against a release of the full report and took part in renewed lobbying efforts in Annapolis as part of a push to kill the Child Victims Act.
According to the attorney general’s office, 156 clerics and lay staff abused at least 600 children and young adults (and likely far more) over a period dating back to the 1930s, and church officials systemically covered up and enabled the abuse through the end of the 20th century.
Filing for the protection under Chapter 11 of the U.S. Bankruptcy Code, as the archdiocese has now done, means it will remain in operation while undergoing a financial reorganization.
A significant consequence for victims is that the bankruptcy filing moves ongoing legal actions against the archdiocese from the state court system to federal bankruptcy court, where they’re consolidated into one case.
Ultimately, a bankruptcy judge will decide on an amount the archdiocese can afford to pay, and claimants will be awarded a percentage of that pot. Some claimants will receive far less than they would have in state court but, as church officials argued, most if not all claimants will receive something.
The bankruptcy filing also restricts any further state lawsuits. Anyone who wishes to file a complaint from this point on must do so by a date agreed to by the archdiocese and a party representing sexual abuse victims in bankruptcy court.
Lastly, and to the concern of many victims, under bankruptcy law, any complaints they file will be kept confidential. Victims and their advocates have said that will severely impair their ability to use lawsuits to learn more about what happened to them and how the church handled their cases.
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