Sacramento Catholic Diocese files for bankruptcy reorganization in wake of abuse lawsuits

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Beset by hundreds of abuse lawsuits, the Catholic Diocese of Sacramento filed for Chapter 11 bankruptcy reorganization in federal court Monday, a move designed to allow the diocese to provide settlements to plaintiffs.

The diocese, which previously announced its plans for the filing, said the move came “as it faces more than 250 lawsuits alleging sexual abuse of minors by clergy and other employees reaching back to the 1950s.”

“This wave of new claims followed a 2019 law allowing victim-survivors to file lawsuits regardless of when the abuse occurred,” the diocese said in an announcement Monday. “The likely cost of the lawsuits far outstrips the diocese’s funds available for litigation or settlement.”

Bishop Jaime Soto said in a statement that the bankruptcy filing will allow for the court to oversee how assets are distributed to plaintiffs.

“There are many victim-survivors who have long suffered from the reprehensible sins committed against them,” Soto said. “This reorganization process will allow me to respond to them as equitably as possible.”

Court documents state that the diocese has between 200 and 999 creditors, with an estimated $100 million to $500 million in assets and the same amount in liabilities.

Sacramento’s diocese joins several others in California and nationwide that have turned to bankruptcy court for protection, and representatives of victims of clergy abuse have denounced the move, including the Survivors of those Abuse by Priests, or SNAP.

“In a bankruptcy, those who have filed lawsuits become ‘creditors,’” SNAP said in a statement last month. “The court will allow a certain period of time for other ‘creditors’ — victims — to come forward.

“However, once the bankruptcy proceeds to its conclusion, anyone abused before the filing date who did not come forward is barred from ever filing a lawsuit. This would include those who do not remember their abuse, those who do not understand the impact it has had on their life, those who are not yet ready to speak out, and – most disturbingly - those children who are too young to understand that they needed to file a claim before the bar date.”

In his statement, Soto said that the financial abyss the diocese is facing stems from church officials who committed the abuse or failed to address allegations of such actions.

“It is the sickening sin of sexual abuse – and the failure of church leadership to address it appropriately - that brought us to this place,” Soto said. “I must atone for these sins.”

The diocese has set up a webpage at scd.org/chapter-11-bankruptcy with additional information.