Editorial: Diocese bankruptcy allows orderly compensation for abuse claims

The Press

October 29, 2020

The filing for Chapter 11 bankruptcy by the Roman Catholic Diocese of Camden this month was unavoidable.

Its inevitability could almost be seen in the 2019 New Jersey law that opened a two-year window for filing claims of sexual abuse against the diocese no matter how long ago the alleged action. That erased the previously applied statute of limitations for such claims. Critics of the law at the time said it would unleash a wave of lawsuits that may bankrupt nonprofit and charitable organizations, eliminating the services they provide to communities.

The diocese tried to handle the claims on its own, establishing a victim compensation fund that had decided 104 of 184 claims and paid out $8.1 million to 71 victims. But whatever chance that approach alone would be enough evaporated in the pandemic.

Government restrictions on attendance at houses of worship have decimated offertory collections at religious institutions of all kinds. A much larger Long Island diocese facing similar circumstances in New York filed for bankruptcy the same day as its Camden counterpart. It said such offerings are about 40% of its annual revenue. More than 20 dioceses nationwide have entered bankruptcy in large part to handle claims of sexual abuse.

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