Catholic Diocese Files for Bankruptcy, Cites Priest Abuse Lawsuits, Coronavirus Pandemic

By Chris Sheldon
NJ.com
October 1, 2020

https://www.nj.com/camden/2020/10/catholic-diocese-filed-for-bankruptcy-cites-priest-abuse-lawsuits-coronavirus-pandemic.html

Bishop Dennis Sullivan prepares the Eucharist during the Camden Diocese's Blue Mass in Blackwood, Wednesday, Sept. 28, 2016.Stephanie Maksin | For NJ Advance Media

The Catholic Diocese of Camden announced that it’s filed for bankruptcy due to rising costs of clergy abuse lawsuit payouts and the challenges of the COVID-19 pandemic.

“The effects of the pandemic, which have curtailed our revenue and deeply impacted our parishioners and neighbors, were further compounded by the over $8 million we have paid out this year through the New Jersey Independent Victims Compensation Program to victims of clergy abuse, money which we have had to borrow,” Bishop Dennis Sullivan said in a message to diocese community.

“If it were just the pandemic, or just the costs of the Victims Compensation Program, we could likely weather the financial impact; however, the combination of these factors has made that impracticable," he wrote.

Sullivan added that the repeal of the statute of limitations for victims also resulted in over 50 lawsuits being filed against the diocese involving claims of abuse that happened in the past.

The bishop said the decision, which he called a reorganization, was made to allow for the fair compensation of abuse victims, payment of debts to the diocese’s creditors and to safeguard its assets.

“It became clear that reorganization is the soundest option to provide those who have been abused an equitable share of the funds available, and also to ensure the future financial health of the diocese,” he said. “The Chapter 11 reorganization is aimed at the maximum fairness and equity possible to address the remaining abuse claims, streamline substantial legal expenses, and avoid the race to the courthouse which would likely cause later claimants to be left without a remedy.”

The diocese’s parishes are separate legal entities under state law and are not part of this bankruptcy filing.

“We will be working with the Court to ensure that our ministries are protected and that we continue to provide the needed services to so many in our diocese and the greater community we serve,” Sullivan said. “I must emphasize that this decision will have no direct effect on our schools, parishes or pension plans.”

The bishop said the diocese created a website was created for anyone who had more questions about the reorganization process.

No other dioceses in New Jersey have filed for bankruptcy as of Thursday night.

The Camden diocese oversees nearly half a million Catholics in 62 parishes in Atlantic, Camden, Cape May, Cumberland, Gloucester and Salem counties.

Law firm Jeff Anderson & Associates, which has filed over a dozen suits against clergy in the diocese, says the organization is shirking their responsibility to victims.

“The Diocese is running from accountability,” attorney Greg Gianforcaro, who has partnered with Anderson in the suits, said in a statement. “Instead of standing up for the people entrusted to their care and acknowledging the harm done to children for which they are responsible, the Diocese is taking drastic, self-serving measures to ensure the truth is suppressed.”