RC Church Considers Bankruptcy Protection Toward Settling Abuse Claims

Catholic Sentinel [Archdiocese of Portland OR]

December 19, 2021

The Roman Catholic Archdiocese of St. John’s says it may have to file for bankruptcy protection as it grapples with settling sex abuse claims linked to Mount Cashel Orphanage in the 1950s, ’60s and ’70s.

In a message to all parishioners on Sunday, Archbishop Peter Hundt said the move would buy the Church more time to finish assessing the value of all its assets “as we develop a proposal for our creditors to settle victims’ claims and creditor liabilities.”

Several months ago, the Church announced that a team of advisors was working on a “major restructuring” plan to resolve the claims, estimated to be in the millions of dollars.

In July, Hundt said that would involve downsizing and consolidation at both the diocese and parish levels, including the potential sale of the flagship Basilica of St. John the Baptist. The Archbishop’s residence in Outer Cove and the Mount St. Francis property on Merrymeeting Road have since been put on the market for sale.

Hundt also acknowledged efforts to raise money to settle the claims would have a significant impact on everyone, but noted the Catholic faith is based on more than just “bricks and mortar.”

In April, the Church accepted responsibility for the abuse that occurred at Mount Cashel Orphanage more than 50 years ago.

The Newfoundland and Labrador Supreme Court of Appeal ruled last year that the Church was liable for the abuse.

The Church tried to appeal that decision further, saying the ruling set a precedent with “profound implications” for its future operations. But in January, the Supreme Court of Canada refused to hear that appeal, effectively exhausting all of the Church’s legal options.

It’s estimated the archdiocese will have to pay out millions in compensation, which will be shared by the four lead plaintiffs who are now in their 70s and 80s, as well as dozens of others. Some of the victims have since passed away since the initial claim was initiated 30 years ago.

Other abuse charges and claims from the 1970s and ’80s were finalized in separate settlements in the late 1990s.