— Survivors Network of those Abused by Priests challenge bankruptcy filing by Santa Rosa Catholic Diocese and plan to ask Attorney General to investigate.
The national Survivors Network of those Abused by Priests wants Attorney General Rob Bonta to investigate the bankruptcy proceedings launched this week by the Roman Catholic Diocese of Santa Rosa and perhaps Oakland as well.
The survivors’ group, known as SNAP, decided to act in the wake of the Oakland bishop’s announcement Thursday that he was “giving strong consideration” to filing Chapter 11 bankruptcy. That announcement came just four days after Santa Rosa Bishop Robert F. Vasa submitted his own bankruptcy petition to the court.
It’s not clear exactly what role Bonta might play as the highest ranking state law enforcement officer. The bankruptcy case, filed Monday, is proceeding in federal bankruptcy court, outside his jurisdiction.
Vasa said the bankruptcy court and the U.S. Trustee assigned to the case will run their own thorough investigations in the course of processing the diocese’s case.
But SNAP is drafting a letter that Executive Director Zach Hiner said calls on Bonta “to explore any option at his disposal that would help discern whether or not these bankruptcies are happening in good faith.”
In particular the group objects to the fact that filing for bankruptcy halts hundreds of pending lawsuits filed by survivors of childhood sexual abuse and, thus, prevents plaintiffs and their lawyers from questioning church officials and other witnesses about the manner in which abusive priests were assigned and supervised.
That conflicts with a provision in state law that allows for survivors of childhood sexual abuse to win triple damages in cases where defendants concealed or covered up sexual abuse, said Dand McNevin, SNAP treasurer and a leader in the Bay Area.
“ (Assembly Bill)-218 was to allow the survivor to explore and find those facts and then those facts become public, and in searching out these complicities they identify who did the covering up,” McNevin said. “It’s a really important part of transparency. This bankruptcy stuff shuts down the discovery process. It wipes out that transparency.”
Once a diocesan bankruptcy case is settled it also means any survivors who were not yet emotionally strong enough or ready to come forward with claims are permanently barred from seeking compensation for their suffering in the future, SNAP members said.
A study by Child USA reports the average age at the time of reporting child sex abuse is 52, well above the 40-year-old limit in current state law and one reason advocates are seeking elimination of a statute of limitations. (A new bill that would do just that, AB-452, was introduced in the State Assembly last month.)
That delayed reporting, said McNevin, means people abused in the past four decades, even those under age 40 when the bankruptcy settles, will be prohibited from filing a case.
Vasa said there has been a high degree of publicity around the clergy abuse scandal and what have now been two “look-back” windows allowing older cases to be filed.
He said there will be more as the bankruptcy proceeds and participants are “literally shaking all the trees” to find any additional survivors who want to offer “proofs of claim” that entitle them to part of the settlement fund.
In addition, most creditor committees organized for other, similar bankruptcies have set aside at least some funds for future claimants, as well, he said.
The Attorney General’s Office has previously demonstrated its interest in the Catholic clergy scandal in 2019 when then Attorney General Xavier Becerra subpoenaed records from six of 12 California dioceses, including Santa Rosa’s, to ensure allegations of sexual misconduct were being properly reported.
Vasa said then that the appropriate records were supplied. Many thought there might be a full report released similar to what had occurred in other states, like Pennsylvania, though none was.
“I would think whatever action the attorney general feels needs to be taken we will respond to the attorney general in the way we have responded before,” he said Friday.
At least 32 dioceses and archdioceses in the United States and its territories to have sought bankruptcy protection amid the clergy abuse scandal since 2004. Among them was the Diocese of Albany, New York, which filed Wednesday.
Most, like Santa Rosa, separately incorporated church parishes in advance in what plaintiff’s attorneys view as “a shell game” cynically designed to shelter assets from survivors seeking compensation, though bishops say it merely aligns their legal standing with church law and the reality of their financial independence.
Attorneys for survivors also have chastised the church for avoiding public exposure of wrongdoing through bankruptcy court, though the Santa Rosa Diocese, at least, says it turned over everything it had long ago.
The inside of Cathedral of the Blessed Sacrament Monday, April 29, 2019 in Sacramento. The Roman Catholic Diocese of Sacramento will release a list this week naming priests and deacons determined to have been credibly accused of sexual abuse of minors, Bishop Jaime Soto said in a letter Sunday.
The Roman Catholic Diocese of Sacramento is facing insolvency following more than 200 lawsuits alleging the sexual abuse of minors.
Bishop Jaime Soto said in a letter Sunday night addressing the civil claims and acknowledging the possible financial impact. The majority of the lawsuits predate the 1990s as state law extends the statute of limitations on these cases.
“A vital aspect of owning and atoning for the sins of the past is resolving claims brought forward by victim-survivors in a fair and responsible manner,” Soto wrote. “I have committed to this principle and attempt to live it in every case.”
The bishop admitted that in the face of a “staggering number” of claims, the “financial challenge is unlike anything we have faced before.
“I must consider what options are available to us, should the diocese become insolvent,” Soto said.
The civil claims are being managed by an Alameda County judge. Soto said the diocese has begun early discussions with the court for a “workable claims resolution process.” The claims were made possible under Assembly Bill 218, the 2019 California law that gave victims a look-back window to file claims through the end of 2022.
“I am committed to resolving all claims as fairly as possible. Given the number of claims that have been presented, however, resolving them may overwhelm the diocese’s finances available to satisfy such claims.” Soto said.
Soto did not name bankruptcy as an option, but said he “must consider what options are available to us, should the diocese become insolvent.”
The list of dioceses that have filed for bankruptcy protection is long and growing. Santa Rosa’s diocese filed for Chapter 11 in December as its bishop, Robert Vasa, calling the move “the inevitable result of an insurmountable number of claims.”
That came after dioceses in Harrisburg, Pennsylvania, and Rochester, New York, settled their Chapter 11 cases late last year. Both dioceses set aside millions for abuse survivors.
The dioceses in Stockton and San Diego have also previously sought federal protection in the face of claims.
The Survivors Network of those Abused by Priests responded to Soto in a statement Tuesday morning. The organization criticized the diocese and said for many years it “ignored cases of clergy sexually abusing and raping children.”
SNAP also asked that the judge demand three items before allowing the diocese to file for bankruptcy: audited financial statements with a 20-year history, a balance sheet that has been audited and includes the current values of the company’s stocks, bonds, annuities and ownership interests and secret files on abusers.
“Sacramento has tremendous cash flows in the form of weekly and monthly donations, all of it tax-free. It owns hundreds, if not thousands, of parcels of property,” SNAP wrote. “Whether or not it segregated those assets into separate holdings, as sophisticated corporations do, should not fool a bankruptcy judge. It all is controlled by the bishop. He alone decides what gets sold and what does not. Not one single transaction in a diocese can go forward without his stamp of approval.”
The list of accused priests and deacons who worked in Sacramento can be viewed at scd.org/clergyabuse/list.
The diocese encourages anyone who may be a victim of clergy sexual abuse, or who knows someone, to report it to law enforcement. The Diocese’s Pastoral Care Coordinator may be reached through a toll-free number at 866-777-9133.
The lawsuit claims the Diocese transferred its properties so that those assets weren’t reachable by its creditors, namely survivors of sexual abuse.
A new lawsuit claims that the Roman Catholic Diocese of San Diego transferred ownership of 291 real estate holdings and parcels across San Diego and Imperial counties to parish corporations in order to conceal the Diocese’s true assets to avoid paying settlements of suits brought by survivors of childhood sexual abuse.
The lawsuit, filed in San Diego County Superior Court by The Zalkin Law Firm on behalf of more than 100 plaintiffs who say they were sexually abused by Catholic priests or employees of the Diocese in either San Diego or Imperial county, claims the Diocese began to transfer its property after the passage of Assembly Bill 218. That California law, passed in 2019, significantly extended the statute of limitations for survivors of childhood sexual assault to file lawsuits against their abusers. Survivors can now file suits up until age 40. Starting in 2020, the bill also opened a three-year window for filing lawsuits regardless of the plaintiffs age.
After the passage of the law, more than 400 lawsuits were filed against the Diocese of San Diego.
Earlier this month, the Diocese announced that its leaders are considering filing for bankruptcy in the face of the legal costs and projected settlement costs of those lawsuits.
Irwin Zalkin, the lead attorney for the plaintiffs in the case, called that claim a public relations spin.
Citing deeds in the County Recorder’s office, the lawsuit posits that the total assessed value of the property the Diocese transferred is over $453 million.
“Plaintiffs believe and allege that all of the transfers described below were done as part of a scheme created, masterminded, and designed by Diocese and the Parishes for the Diocese to transfer properties to the Parishes so the assets of the Diocese are not reachable by the Diocese’s creditors, particularly not reachable by Plaintiffs to satisfy Plaintiffs’ Claims against the Diocese,” the lawsuit states.
In a press release, Zalkin said the Diocese made a similar claim in another case that their parish real estate assets were separate from their own real estate assets, and that they were being held in trust for their parishes. That case was settled before that argument was officially decided, Zalkin said, but he believes that the court will not agree side with the Diocese.
“The judge will find that this is a sham,” Zalkin said.
Zalkin’s firm was appointed the liaison counsel on behalf of 144 sexual abuse survivors who settled with the Diocese for $198 million during the Diocese’s bankruptcy proceedings in 2007.
The lawsuit also alleges that the Diocese set up a “Independent Compensation Fund.” Survivors of clergy sexual abuse could submit a claim against a priest, which would then be evaluated by an independent claim evaluator, to see if the survivor was eligible for a settlement. The lawsuit claims that the process was designed to draw out survivors who were eligible to bring lawsuits against their abusers, and given settlements that were “pennies on the dollar.”
“At the same time that the ‘Independent Compensation Fund’ was becoming operational and the Senate was passing AB 218 on to the Governor in mid-September of 2019, the Diocese was engaged in a massive effort to transfer title to hundreds of millions of dollars of real property for no consideration,” the lawsuit suites. “Plaintiffs are informed and believe and on that basis allege that this fraudulent scheme, which is described below and is the subject of this lawsuit, was intended to defraud Plaintiffs and others with claims based on clergy sexual abuse.”
At a press conference on Wednesday, Zalkin added that the properties that were transferred by the Diocese to parish corporations included private homes, and most of the properties were transferred in 2019, the year Assembly Bill 218 was passed. The parishes did not pay for the properties either, Zalkin said.
“This is fraud,” Zalkin said.
The lawsuit, Zalkin said, is the linchpin to making sure the survivors of clergy sexual abuse get adequate compensation if the Diocese declares bankruptcy again.
The Roman Catholic Diocese of San Diego did not immediately respond to a request for comment on the lawsuit.
A victim of child sexual abuse, who Reuters agreed only to identify by his first initial, C, is pictured here at a California state park, December 23, 2022.
Lawmakers around the United States have tried to grant justice to victims of decades-old incidents of child sexual abuse by giving them extra time to file lawsuits. Now some of the defendants in these cases, including church and youth organizations, are finding a safe haven: America’s bankruptcy courts.<
In New York, nearly 11,000 cases flooded state courts, many seeking to hold Catholic dioceses responsible for sexual abuse by clergy, after a 2019 law suspended statutes of limitations that would have otherwise barred many of the lawsuits. In response, four New York dioceses that collectively faced more than 500 sexual-abuse claims filed for bankruptcy. That halted the cases — and blocked those from anyone who might sue later — and forced the plaintiffs to negotiate a one-time settlement for all abuse claims in bankruptcy court.
The pattern has taken hold across the United States, a Reuters review of bankruptcies precipitated by mass child sexual-abuse litigation found.
Many of the defendants turning to bankruptcy court are nonprofit organizations. In court filings dating back to 2009, the Boy Scouts of America, a New York boys & girls club and 13 separate Catholic institutions each have cited state laws extending abuse victims’ right to sue as factors in their decisions to seek bankruptcy protection.
Such bankruptcies are “the counterpunch” to the state laws enabling more victims to seek justice and compensation through lawsuits, said Stephen Rubino, a lawyer who’s represented clergy abuse victims for more than 30 years.
In all, 23 states, two territories and Washington, D.C., have passed laws that suspend statutes of limitations for sexual-abuse victims who were previously prevented from suing over older cases. The suspensions typically last a year or more, allowing plaintiffs to file new lawsuits involving old abuse cases during that period. California, New York and several other states passed such laws in 2019.
Bankruptcy courts are undermining the impact of the statutes, some legal experts and victims’ advocates say. Judges overseeing these Chapter 11 filings set their own deadlines to file a sexual-abuse claim for compensation from the bankruptcy settlement.
Victims who miss the bankruptcy claims-filing deadline receive nothing or are forced to compete for limited funds set aside for unknown future claimants, the Reuters review of bankruptcies found.
“As we dramatically increase access to justice through statutes-of-limitations reform, we have more organizations going into bankruptcy because, frankly, bankruptcy law favors the organizations,” said Marci Hamilton, the founder of Child USA, a group that has advocated for laws expanding sexual-abuse victims’ rights to sue.
Child sexual-abuse victims often don’t come forward until much later in life, sometimes past the age of 50, according to several victims’ lawyers and studies on abuse disclosure. Some are not aware of bankruptcy proceedings that affect them until it is too late.
Bankruptcy claims-filing deadlines can force victims to come forward before they are ready, Hamilton said. And abuse claimants have limited leverage in Chapter 11 cases that halt their litigation and shield organizations such as dioceses, schools or youth organizations from current and future lawsuits, she said.
“The federal bankruptcy law is just defective when it comes to sexual-abuse victims,” Hamilton said. “Their voice is just stolen from them.”
Reuters identified settlements in 23 bankruptcies precipitated by child sexual-abuse scandals that halted current and future lawsuits and forced claimants to seek compensation from a trust. The cases involved the Boy Scouts, 21 Catholic organizations and USA Gymnastics. The youth gymnastics organization filed for Chapter 11 protection in 2018 amid a surge of lawsuits alleging abuse by convicted child sexual abuser Larry Nassar. (Now in prison, Nassar could not be reached for comment.)
The Boy Scouts and USA Gymnastics did not comment for this story
The Boy Scouts and others have argued that their bankruptcy plans seek to pay claimants fairly and equitably, whereas civil litigation can result in some victims winning large jury verdicts and others receiving smaller judgments or nothing. USA Gymnastics has said it sought bankruptcy protection “to pave the way toward a settlement” with abuse survivors, who last year approved a plan paying them $380 million.
The organizations also often conduct extensive marketing campaigns to ensure that potential victims know they can seek compensation in the Chapter 11 cases, a review of the cases shows. The Boy Scouts, for instance, said on a website the group set up for restructuring that it launched a “comprehensive noticing campaign” in the media.
The Madison Square Boys & Girls Club in New York City referred Reuters to a bankruptcy-court declaration filed in June by its chief financial officer, Jeffrey Dold. Dold said the organization sought Chapter 11 protection after trying and failing to resolve about 140 pending claims of sexual abuse by club employees and volunteers between the 1940s and 1980s, all filed after the passage of New York’s claims-revival law. The club filed bankruptcy, Dold said, “to provide a forum to address those claims fairly and equitably.”
The U.S. Conference of Catholic Bishops had no comment on the new state laws or their impact nationwide on Catholic organizations facing sexual-abuse lawsuits. In a statement to Reuters, it said it defers to state and local catholic leadership organizations on state laws and bankruptcies. The conference noted the importance of “pastoral outreach” to abuse victims and said that local dioceses have victim assistance coordinators to “assist survivors and accompany them as they seek healing.”
The nonprofit organizations’ bankruptcies don’t protect the individual abusers themselves, whom victims can still sue. But they do grant lawsuit immunity to the entities that oversaw employees or volunteers accused of abuse.
Lawyers defending organizations targeted by sexual-abuse claims, along with some plaintiffs lawyers, say bankruptcy provides a fair way to compensate victims, many of whom want to avoid the ordeal of a lawsuit and a potential trial. Moreover, organizations and insurers paying the settlements won’t agree to any deal that doesn’t shield them from additional liability, said Susan Boswell, a retired lawyer who represented dioceses in bankruptcies from Arizona to Minnesota.
“If you can’t have finality,” she said, “then you are not ever going to be able to get one of these cases done.”
America’s federal bankruptcy courts play a critical role in justice and commerce by giving businesses overwhelmed by debt an orderly process to settle with creditors during a reorganization or liquidation. Those debts can include liability from lawsuits over deadly products, fraud, sexual abuse or other wrongdoing.
The power of U.S. bankruptcy courts to grant lawsuit immunity to organizations in bankruptcy, their leaders and affiliated entities has expanded over time. And so have the legal tactics of entities seeking Chapter 11 protection: Some corporations engulfed in scandals are now creating subsidiaries solely to absorb their lawsuit liability and declare bankruptcy.
Nonprofit organizations facing sexual-abuse lawsuits have pulled another page from the corporate bankruptcy playbook: In striking settlements, they typically seek “nondebtor releases” for their associated entities, such as religious schools and individual parishes. Such releases shield people and entities from lawsuits over issues taken up in bankruptcy settlements. By piggybacking on a nonprofit’s Chapter 11 filing, its affiliated organizations or leaders often get these liability shields without having to file for bankruptcy themselves.
Judges often appoint someone to advocate for the interests of potential victims who have not yet sued or made a claim in bankruptcy court. Known as future claims representatives, these appointees are often lawyers or financial professionals who are paid by the debtor and tasked with estimating the number of future claims and the funds needed to cover them. The reality, however, is that late filers often end up competing for smaller amounts than those who meet the deadline, according to court records reviewed by Reuters and attorneys involved in the proceedings. Unknown claimants become “numbers on a chart,” Rubino said.
JUSTICE DENIED
A former Boy Scout, C, alleges a Scout leader abused him when he was a teenager. Reuters agreed to identify the former Scout, now 40, only by his first initial.
He sought compensation in the Boy Scouts bankruptcy in June, long after a deadline of November 16, 2020 for filing claims. C is now unlikely to recover much, if anything, from the $2.46 billion settlement the Boy Scouts reached with claimants alleging sexual abuse, his lawyer said. That’s because claimants who miss the deadline face a gauntlet of additional hurdles and conditions, according to C’s lawyer and a review of the Boy Scouts settlement terms.
The Boy Scouts bankruptcy reorganization plan, approved by a judge in September, halts all lawsuits against the Boy Scouts, local councils, churches and other organizations that chartered scouting activities.
The bankruptcy’s claims-filing rules take precedence over a recent law passed in California, where C says he was abused, that expanded sexual-abuse victims’ rights to sue. The bankruptcy proceedings generally trump state laws because bankruptcy courts are federal, and typically have the power to override state statutes and halt state lawsuits or court orders.
Reuters Image
U.S. Bankruptcy Judge Laurie Selber Silverstein reasoned in approving the Boy Scouts settlement that it was a better solution for victims than seeking compensation in trial courts.
Silverstein declined to comment for this story. In a July opinion approving aspects of the Scouts’ reorganization plan, she noted that insurance carriers, local Scouts councils and chartered organizations would not contribute to the settlement without receiving nondebtor releases from liability. She agreed with lawyers for the Boy Scouts and some claimants that the only alternative to a settlement was a “‘death trap’ of litigation with minimal recoveries in sight.”
“These boys–now men–seek and deserve compensation,” the judge wrote, for “abuse which has had a profound effect on their lives and for which no compensation will ever be enough.”
Beyond questions of fair compensation, C said the bankruptcy is preventing him from getting his day in court against the Boy Scouts to present what happened to him.
C grew up in an unstable home in northern California. His mother considered the Boy Scouts a safe environment for her son. For years after a Scout leader allegedly abused him and other boys, C struggled with acknowledging that what had happened to him was wrong, he told Reuters. He had trusted his Scout leader.
Within the past couple of years, he spoke at length with another former Scout about the leader’s behavior, he said. The emotional conversation prompted C to reflect on the damage in his own life stemming from the abuse. He said in an interview that his own struggles relating to others began to make more sense. C lives with his mother, sometimes sleeps in his car and has struggled to find a steady career.
“I’m waiting to stand in front of a judge,” C said, and hoping for that judge to say: “‘What happened to you was wrong.’”
‘THE PRIEST WOULD NEVER DO THAT’
Some plaintiffs’ attorneys say bankruptcy proceedings can provide a better way to compensate many sexual-abuse victims than trial courts. Victims often don’t want to go through the ordeal of suing their abusers or the organizations that may have enabled them, said Dan Lapinski, a Motley Rice LLC lawyer representing Boy Scouts claimants. For them, seeking compensation through bankruptcy can allow victims to file a claim confidentially and avoid reliving their trauma in open court.
“I have clients who fall into that category” in the Scouts matter, Lapinski said, noting that these victims might not have pursued their claim at all outside of bankruptcy court.
Financial coffers of individual dioceses are usually smaller than those of large corporations, said Boswell, the retired lawyer who has represented dioceses facing abuse allegations in bankruptcies. Expensive litigation cuts into the money available for compensation, she said, but a bankruptcy reorganization can attempt to pay all claimants equitably.
Still, there is often little left for claimants who come forward later, after bankruptcy filing deadlines pass.
In January 2020, a 59-year old former altar boy named Henry attended a church service in Minnesota on a visit back to the state to see family. After the service, Henry said, the priest spoke to parishioners about the financial impact of the 2018 bankruptcy of the local Winona-Rochester diocese, caused in part by sexual-abuse claims.
Henry knew the abuse first-hand. When he was 17, a priest assaulted Henry in a pool shower after swimming, he said in an interview. He had kept what happened to himself in part because he thought nobody would believe him, said Henry, who spoke on condition that he be identified only by his middle name.
Before clergy sexual-abuse scandals emerged worldwide, his community’s attitude was “the church would never do that, the priest would never do that,” he said. “You’re kind of squelched from the get-go.”
Finding out about the bankruptcy in church that day emboldened Henry to come forward, too, he said. Two days after the priest’s comments, he contacted a lawyer who filed a late claim on his behalf. But relatively little money — a maximum of $750,000 — had been set aside for claimants who came forward after a 2019 deadline. Henry received $20,000, which he described as “an almost laughable“ amount.
Henry could receive more money later, depending on how many additional claims are filed and how a trustee who determines payouts views his claim. But a final determination won’t be made until a deadline for filing late claims passes several years from now, according to documents Reuters reviewed. The judge in the case declined to comment.
By comparison, the settlement covering the 145 sexual-abuse claimants who filed on time was nearly $28 million. That would equate to about $190,000 per victim. The amount individual claimants might receive varies, depending on factors including the duration, severity and impact of their alleged abuse, according to court documents.
“What I don’t like is that they put some arbitrary cap on anybody who filed after” the deadline, Henry said.
Peter Martin, a spokesperson for the Winona-Rochester diocese, declined to comment on its bankruptcy proceedings. Martin did not respond to inquiries about Henry’s allegations of sexual abuse.
POWER AND TRUST
Statutes of limitations exist for good reason, some legal scholars say.
>Historically, states enacted them to encourage plaintiffs to file timely lawsuits based on “reasonably fresh” evidence, said Marie T. Reilly, a professor at Penn State Law in University Park, Pennsylvania. Reilly argues that allowing victims to sue long after their alleged abuse threatens the integrity of the legal system in the name of exacting retribution against institutions such as Catholic dioceses.
Over time, memories deteriorate, witnesses die and documents can go missing, she said. “The ability to mount a defense deteriorates with the passage of time,” Reilly said.
New York State Senator Brad Hoylman, a Democrat, sponsored the state’s bipartisan legislation reviving child sexual-abuse claims. He told Reuters he pushed the bill because it can be especially difficult for individuals to come forward with allegations against abusers who are often “in positions of power and trust.”
For thousands of victims with revived legal rights to seek accountability from institutions in trial courts, bankruptcy filings can be crushing.
Doug Kennedy was a teenage Boy Scouts camp staffer in upstate New York when a camp director raped him repeatedly and forced him to engage in other sexual activity, according to a lawsuit he filed. His case was halted by the Boy Scouts bankruptcy. In the years after the assaults, he told Reuters, he buried his memories of the abuse.
The man Kennedy accused of abuse, Bruce DeSandre, declined to comment through his attorney. In a court filing, DeSandre denied Kennedy’s allegations of sexual abuse and argued that New York state’s revival law was unconstitutional.
When Kennedy, now a college professor, finally came to grips with his abuse, the statute of limitations for filing a lawsuit had passed.
In January 2019, he retreated to his office at Virginia Wesleyan University, drew the shades and watched a streaming feed of the New York state legislature’s vote to change the law and allow victims like Kennedy to file lawsuits over abuse that occurred long ago.
“I broke down, completely broke down,” he said.
He thought he would finally get a chance to get accountability for what was allowed to happen to him. Later that year, in August, he filed his lawsuit against defendants including a Boy Scouts local council and DeSandre.
About six months later, the Boy Scouts filed for bankruptcy. Kennedy said his feeling of hope drained away when he heard the news.
“Bankruptcy is not justice,” he said. “Bankruptcy is business.”
— Church’s effort to stay afloat while settling abuse cases is scorned as a cynical move to shield secrets and assets.
Rev. Robert Vasa, the new Coadjutor Bishop of Santa Rosa, closes his eyes in prayer during a mass for his reception at St. Eugene’s Cathedral in Santa Rosa, California, Sunday, March 6, 2011.
Scores of survivors of clergy abuse — people who had spent decades trying to escape the grief and trauma of childhood sex assault — have come forward over the past three years after deciding now is finally the time to seek justice.
At least 130 — likely many more, attorneys say — have filed or will file lawsuits against the Santa Rosa Roman Catholic Diocese during a special three-year window that allows adults of any age to file personal injury cases for childhood sex abuse in California. That window closes on New Year’s Eve.
But none of those cases is likely to go to trial.
The diocese announced to the court Nov. 30 that it would seek Chapter 11 bankruptcy protection early next year, a move that will suspend state court proceedings and leave the whole matter in federal bankruptcy court.
In effect, experts and plaintiffs attorneys say, that means the judicial process becomes less about finding the truth in each case and holding those in power to account for decades of horrific abuse and more about assigning dollars and cents.
The priority under Chapter 11 reorganization is the well-being of the church and its ability to carry on while the abused become just more creditors, “fighting for the same dollar” as, say, a roofer or any other vendor, said Professor Marci Hamilton. She is the longtime senior fellow in the Program for Research on Religion at the University of Pennsylvania and founder and chief executive officer of CHILD USA, a nonprofit think take dedicated to protecting children from abuse.
“The truth-seeking function of filing a lawsuit is sidelined, and the only issue that winds up being part of the discussion is, ‘How much money can we, the debtor, save by filing for bankruptcy?’ ” she said.
Assessing the claims, San Franciscoplaintiffs attorney Mary Alexander said, also becomes a function of categorizing and counting different kinds of abuse “rather than actual harm,” and overall seeing “a huge case” turn “into a little tiny settlement.”
It’s also “taking away from their ability to find out what really happened — who at the church was responsible or at the school — and in exchange for a two-to-three-year delay and for far less money,” Alexander said. “And it’s still going to be the insurance companies that are paying.”
Months, likely years, will soon be spent fully assessing church assets and vetting claims to determine how church funds should be divided among the survivors.
Attorney Adrienne Moran, whose Santa Rosa law firm has long represented the Santa Rosa Diocese, said bankruptcy is a way to make sure whoever is first in the door doesn’t take everything and leave nothing for the rest.
“The purpose of filing for the bankruptcy is really to make sure that all of the survivors get a fair and equitable settlement,” Moran said, “and to ensure that Plaintiff No. 1, who might go to trial, doesn’t get all of the reward and then leave nothing for the remainder of the survivors.”
Santa Rosa Bishop Robert Vasa said the diocese really had no choice, given what he said were limited diocesan assets and “the overwhelming number of sexual abuse lawsuits filed against the diocese.”
Bankruptcy additionally would short-circuit the 2019 state legislation that expanded the time for survivors of childhood sexual assault to file civil cases.
Previously, child sex abuse survivors could file suit in California until they turned 26. The 2019 legislation, AB-218, raised the age cap to 40 and opened the three-year window for those 40 and older to file suits for childhood abuse.
But bankruptcy is a federal court proceeding, which supersedes state law, and would foreclose future claims for actions that occurred before the bankruptcy.
That means no one, even those under 40, would ever be able to sue the diocese again for past abuse, attorneys said.
“I’m sure that’s part of the reason they’re going into bankruptcy,” said Rick Simons, an East Bay plaintiffs attorney, who serves as liaison counsel for the Northern California cases generated by the three-year window, all of which are being coordinated through the Alameda County Superior Court.
“One thing the bishop wants to avoid,” said Sacramento attorney Joseph George Jr., “is to get sued two years from now and four years from now and seven years from now. They want to end this.”
The diocese, which runs from Petaluma to the Oregon border and includes 41 parishes and more than 178,000 parishioners, already had paid out more than $33 million in clergy abuse claims over the past three decades, some of it paid through insurance.
