Diocese of Camden Files to Reorganize Finances under Bankruptcy Protection

By Jim Walsh
Cherry Hill Courier-Post
October 1, 2020

https://www.courierpostonline.com/story/news/2020/10/01/camden-diocese-chapter-11-bankruptcy-coronavirus-pandemic-clergy-sex-abuse/5889793002/

CAMDEN - The Diocese of Camden has filed for protection from creditors due to the combined impact of clergy sex abuse claims and the COVID-19 pandemic.

"I have had to make many decisions in my time as your bishop, but few have been as

considered as this one," Bishop Dennis Sullivan said in a letter released Thursday night.

Sullivan said the diocese had filed for reorganization under Chapter 11 of federal bankruptcy law.

He noted the South Jersey diocese has paid out more than $8 million through a compensation fund for sex abuse victims.

Sullivan also said the diocese, which recently withdrew from the victims' fund, faces more than 50 sex-abuse lawsuits due to a state law that has waived the statute of limitations for such cases.

At the same time, the bishop said, the ongoing pandemic has "curtailed our revenue and deeply impacted our parishioners and neighbors."

"If it were just the pandemic, or just the cost of (payments to sex abuse victims), we could likely weather the financial impact," Sullivan wrote.

The diocese said its 251-page filing "immediately stops all efforts at collection of debts and legal actions" against it.

The filing estimates diocesan assets are between a range of $50 million to $100 million.

It lists more than 50 properties, including the diocesan headquarters at 631 Market Street in Camden, and 17 vehicles. It also notes an "episcopal cross, gold, with several jewels, from (Pope) Pius X."

The filing gives no values for those items.

Liabilities are between about $10 million to $50 million, the filing says.

Attorneys who have sued the diocese over clergy sex abuse claims were critical of the filing.

"Church leadership is trying every trick in the book to avoid consequences for their reckless endangerment of children," said Greg Gianforcaro, a Phillipsburg lawyer with several suits pending against the diocese.

Gianforcaro said the filing was a first for a Catholic diocese in New Jersey. More than two dozen dioceses and archdioceses “have previously filed Chapter 11 bankruptcy to avoid facing the civil justice system, which forces transparency and accountability," he added.

"The Diocese of Camden has brought on its own misery and in turn failed clergy sexual abuse survivors, parishioners and society," said Mitchell Garabedian, a Boston attorney.

Sullivan said a court-supervised reorganization of diocesan finances "is the soundest option" to compensate survivors of clergy sex abuse "and also to ensure the future financial health of the diocese."

He said the filing is intended "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.

He said the filing also will allow for "the safeguarding of the assets which make our religious, educational and social service ministries possible."

In a statement, the diocese said its reorganization should not affect parishes, schools or Catholic Charities, describing them as "separate legal entities."

"There are no current plans to reduce staff or programs," it added.

The diocese serves about 486,000 Catholics in six South Jersey counties.

The Camden diocese hinted at financial troubles in July, when it withdrew from the Independent Victim Compensation Program. The fund was supported by dioceses across the state and the Archdiocese of Newark.

In leaving the fund, the Camden diocese cited a "precipitous decline in revenue resulting from the COVID-19 pandemic."

The diocese also said it was "fast approaching a point where it will not be able to continue to borrow the funds necessary to pay the amounts awarded by the program."

At least seven sex-abuse suits have been filed against the diocese since its withdrawal from the fund, according to state court records.

The suits claim the diocese failed to protect children from predator priests from the 1960s to the early 1990s.

They seek damages for alleged assaults at parishes in Bellmawr, Camden, Gibbstown, Newfield, Pennsauken, Somerdale and Waterford, Two of the accused priests also served at Camden Catholic High School in Cherry Hill and St. James High School in Carneys Point.

The Camden diocese has said it paid financial settlements of more than $10 million since 1990 "to offer a measure of justice to the survivors of clerical abuse."

It also has spent almost $1 million for professional counseling services.

Jim Walsh is a senior reporter with the Courier-Post. His interests include crime, the courts, economic development and being first with breaking news. Reach him at jwalsh@gannettnj.com.