Catholic Diocese Files for Bankruptcy, Antonio Prado, Community News, October 19, 2009

Catholic Diocese Files for Bankruptcy

By Antonio Prado
Community News
October 19, 2009

http://www.communitypub.com/breaking/x1693435888/Catholic-Diocese-files-for-bankruptcy

The Catholic Diocese of Wilmington had to file for Chapter 11 bankruptcy to give it the best opportunity, given finite resources, to provide the fairest possible treatment of all victims of sexual abuse by priests from the diocese, said the bishop, the Most Rev. W. Francis Malooly.

Wilmington, Del. — The Catholic Diocese of Wilmington faces a financial challenge that not even the second collections held regularly at Sunday Mass can help.

The diocese has filed for Chapter 11 reorganization under the U.S. Bankruptcy Code to allow it to operate while addressing sexual abuse law suits, said Bishop W. Francis Malooly in a prepared statement.

“Our hope is that the Chapter 11 proceedings will enable us to fairly compensate all victims through a single process,” Malooly said.

The diocese filed Sunday, Oct. 18 after failing to reach a settlement with eight victims whose lawsuits are scheduled for trial, said diocesan attorney Anthony Flynn, of Young Stargatt Conaway & Taylor. There are 142 claimants in all. Most are not scheduled for trial.

If there were too large a settlement with the first eight victims, the diocese would be left with inadequate resources to fairly compensate the remaining 134 claimants, Malooly said in a press conference at the Diocesan Office Monday, Oct. 19.

“We have a finite amount of resources and it became clear we would never get through 142 complainants in any fair or equitable way,” Malooly said.

Attorney Thomas S. Neuberger, co-counsel for 88 survivors of rape and other childhood sexual abuse by dozens of priests, harshly criticized the filing in a statement. So did Bartholomew J. Dalton of Dalton & Associates, an attorney for more than 50 victims of sexual abuse who filed lawsuits under Delaware's Child Victims Act. in a separate statement.t.

“This filing is the latest, sad chapter in the diocese’s decades long ‘cover up’ of these despicable crimes, to maintain the secrecy surrounding its responsibility and complicity,” Neuberger said.

"It is a calculated and reprehensible legal tactic that deprives sex abuse victims their day in court and keeps hidden damning evidence that will show how diocese officials were complicit in allowing dozens of men to molest hundreds of children across the state," Dalton said.

Malooly said the bankruptcy filing is not intended to dodge responsibility for past criminal misconduct by clergy or for mistakes made by diocesan authorities.

“We never opposed disclosure of brief files,” he said at the press conference. “Bishop Saltarelli in 2006 made it very clear who the 18 priests [accused of abuse] were. I think we’ve been very transparent.”

In a May 7 letter published in the diocesan newspaper, The Dialog, Malooly said the diocese paid nearly $1.6 million for 11 settlements before the national scandal broke in 2002. From 2002 up to the 2008 fiscal year, eight more cases were settled for $6.2 million.

As a result of the bankruptcy filing, all of the diocese’s assets will be laid bare, said diocesan attorney Robert Brady, also of Young Stargatt Conaway & Taylor.

What will not be listed as assets are buildings and property owned by individual parishes in Delaware and Maryland’s Eastern Shore, Brady said.

The 57 parishes and their parochial schools, the religious orders and their affiliated schools, diocesan and inner city schools, Catholic Charities Inc., Catholic Cemeteries Inc and Catholic Youth Organization Inc. are incorporated separately from the Diocese of Wilmington Inc.

Malooly also said the diocese does not have access to the assets of the Vatican in Rome