Harrisburg Catholic diocese declares bankruptcy, the first to do so in Pa. under weight of clergy sex abuse claims

By Jeremy Roebuck And Angela Couloumbis
Philadelphia Inquirer
February 19, 2020

https://bit.ly/2V9eP7B

Bishop Ronald W. Gainer, pictured here in a 2018 file photo, announced Wednesday his diocese would become the first in Pennsylvania to seek federal bankruptcy protection in the face of potentially crushing court judgments stemming from clergy sex abuse.

https://www.inquirer.com/news/harrisburg-diocese-bankruptcy-catholic-clergy-sex-abuse-victim-compensation-lawsuits-20200219.html The Diocese of Harrisburg filed for bankruptcy Wednesday, becoming the first of Pennsylvania’s eight Roman Catholic dioceses to seek protection from financial claims in the aftermath of a scathing 2018 grand jury report that revealed decades of sexual abuse and cover-up by the church’s top leaders.

Diocesan officials are expected to discuss their bankruptcy protection plans at a 3:30 p.m. news conference, two sources familiar with the matter have told The Inquirer and Spotlight PA.

In its petition with the bankruptcy court, the diocese reported having an estimated $1 to $10 million in assets. Among its top 20 creditors, 19 were accusers with unresolved clergy sex abuse lawsuits work their way through the courts.

The move comes six months after the diocese announced it had paid out $12 million to more than 100 victims of decades-old sexual abuse as part of an independently run compensation program similar to those launched by most of the state’s other Catholic dioceses.

Church officials said they hoped the funds would provide compensation to victims whose claims were too old to pursue in court. But victims and their lawyers have viewed the programs with skepticism, saying that while the funds’ payouts are better than nothing, they have allowed the dioceses to limit the crushing financial penalties they might face should Pennsylvania voters approve a proposed “window law” that would allow accusers with expired claims to sue.

Nationwide, more than 25 Catholic dioceses — including the Diocese of Rochester, N.Y., which also launched a victim compensation fund — have previously sought bankruptcy protection.

The Boy Scouts of America, facing its own wave of sexual abuse litigation, sought similar protections in federal bankruptcy court in Delaware on Tuesday.

In a statement, the venerable youth organization said that in doing so it had two key objectives: to “equitably compensate victims who were harmed during their time in scouting and to continue carry out its mission for years to come.

As in that case, the Harrisburg’s diocese’s filing Wednesday will pause any ongoing litigation against it while the bankruptcy court considers its reorganization plan. That includes a multimillion-dollar lawsuit brought by five sisters who saythey were all abused by the same Dauphin County priest in the 1980s.

The Fortneys filed their suit last year against the diocese in New Jersey — where they say some of their abuse occurred — on the same day the state opened a two-year window for old claims similar to ones that opened in seven other states last year, including New York and California.

Pennsylvania’s own proposed version of a “window law” ignited a contentious battle in Harrisburg, drawing opposition from Senate Republicans who warned it would violate the state Constitution.

Still, in November, lawmakers reached a compromise, opting to leave the decision up to voters in a statewide referendum.

But, said Benjamin Andreozzi, lawyer for the Fortney sisters, Harrisburg’s bankruptcy might limit what funds would be available should that measure ever pass.

“It’s just disappointing,” he said.

Lawyer Richard Serbin, who also is pursuing at least two sex abuse claims against the diocese in Pennsylvania courts, described the move as a setback for his clients but said he wasn’t “ready to throw in the towel just yet.”

“It doesn’t mean that survivors and their claims are dead in the water and that they get nothing,” he said. “There is a process to determine via the bankruptcy trustee what assets are available and to try to resolve outstanding claims. Survivors would be treated just like any other creditor.”

Five other Roman Catholic dioceses in Pennsylvania have paid out over $80 million to 468 individuals through their compensation funds, said Camille Biros of the Law Offices of Kenneth R. Feinberg, PC, which administered the funds.