Diocese of Oakland files for bankruptcy in the face of hundreds of sex abuse lawsuits

CBS News [New York NY]

May 8, 2023

The Diocese of Oakland announced Monday it was filing for Chapter 11 bankruptcy in the face of hundreds of potential sex abuse lawsuits against the diocese.

In an open letter to parishioners, Bishop Michael Barber said the bankruptcy filing “is the best way to support a compassionate and equitable outcome for survivors of abuse, while ensuring we continue to provide the essential services and support so crucial to our parishioners and communities.”

Barber had alerted parishioners in March to the possibility of the bankruptcy filing because of the impact of AB 218, a state law that extends the statute of limitations for victims of childhood sexual abuse to file civil lawsuits. 

His March announcement came days after The Diocese of Santa Rosa filed for bankruptcy for the same reason. The Santa Rosa diocese was facing a second wave of sexual abuse lawsuits after already paying out about $35 million in settlements.

Barber said while the statute of limitations window closed on December 31, claims prior to that date were still being processed and the diocese was still receiving notification of those claims.

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“As of today, we have more than 330 claims. A great majority of the alleged abuse occurred between 1960 and 1989,” said Barber. “Since then, the diocese has put in place robust safeguards to protect children and vulnerable adults including background checks and training about the nature of child sexual abuse, how it is perpetrated, how to report it, and strategies for prevention.”

The Diocese of Oakland website said the bankruptcy process would be transparent and “allows all claimants equal access and an equitable share in the assets available to pay claims” while also allowing the church to continue its “mission as the Catholic Church in Alameda and Contra Costa counties,” according to the website. 

The church has “limited cash reserves” but insurance and the potential sale of underutilized assets could also help pay some of the claims, according to the website.

Barber said parishes will continue to celebrate Mass and other sacraments, schools would not be impacted, and charitable work would continue. However, there will be downsizing among parishes which will involve closing some churches and repurposing of other locations used by the diocese.

In a FAQ section on the diocese website, church leaders said the possible decision to file for bankruptcy is not intended to minimize its responsibilities to survivors of sexual abuse.

The Survivors Network of those Abused by Priests (SNAP) called the bankruptcy filing “an attempt to deny justice and transparency to the more than 330 survivors who have filed lawsuits alleging child sexual abuse,” according to a statement Monday.

SNAP said the Oakland Diocese and other Catholic churches across the country file bankruptcy in order to protect their assets and avoid damning testimony in court about widespread sexual abuse among priests.

“The Diocese of Oakland is morally bankrupt, but they do not deserve to be declared financially bankrupt,” said the statement. “It owns a Cathedral worth $200 million. It has hundreds of acres of land in Piedmont, Orinda, Lafayette, and Danville. Except for character and integrity, it is not poor in our opinion.”

Barber said he would meet with pastors of the diocese Tuesday to discuss how the bankruptcy filing would impact parishes and the implementation of the diocese’s Mission Alignment Process, an undertaking to address a decades-long decline in Mass attendance – including a precipitous drop at the start of the pandemic – and an overall decrease in the number of priests.