Minnesota Catholic Diocese Files for Bankruptcy after Abuse Verdict

By David Bailey
Reuters
December 7, 2015

http://www.reuters.com/article/minnesota-diocese-idUSL1N13W22T20151207#JyZW0sllD3F50oVo.97

A Catholic diocese in northeastern Minnesota filed for bankruptcy protection on Monday following a jury's decision in November that found it 60 percent responsible for a judgment involving a clergy sex abuse victim, the organization said.

A jury awarded the man more than $8 million, and reorganizing under Chapter 11 bankruptcy protection became a necessity after failed efforts to reach a resolution to assist all abuse victims, the diocese said in a statement.

"Given the magnitude of the verdict, the diocese was left with no choice but to file for reorganization," said diocese Vicar General James Bissonette.

The award stemmed from a case brought by a man who said he was abused in 1978 by a priest at a church in the diocese.

The diocese's last fiscal year operating budget was less than $3.3 million. That was insufficient even if insurance and savings were used to cover the judgment, and would leave no resources for other victims who have brought claims, the diocese said.

Bissonette said the filing safeguards the diocese's limited assets and ensures that resources will be shared properly with all victims while allowing day-to-day operations to continue.

The Roman Catholic Archdiocese of St. Paul and Minneapolis also said when it first sought bankruptcy protection in January that the filing would allow its finite resources to be distributed among victims and survivors of child sex abuse by clergy.

The archdiocese and dioceses around Minnesota have faced numerous lawsuits raising claims of child sex abuse by clergy. Minnesota in 2013 gave plaintiffs until May 2016 to file old claims that were otherwise barred by the statute of limitations.