Survivors of Archdiocese of Baltimore Sexual Abuse as Children Only Have 3 Months Remaining to File Claims in Bankruptcy Court

About Lawsuits [Baltimore, MD]

March 1, 2024

By Russell Maas

Archdiocese of Baltimore bankruptcy filing has resulted in a deadline of May 31, for individuals who were sexually abused by priests or clergy to present claims

Following the release of a four year-long investigation by the Maryland Attorney General’s Office early last year, which highlighted an extensive history of childhood sexual abuse in the Archdiocese of Baltimore, hundreds of survivors are now coming forward to pursue financial compensation before a May 31, 2024 deadline established by a U.S. bankruptcy court.

While many of these childhood sexual abuse claims were previously barred by the Maryland statute of limitations, since it often takes survivors decades to come forward and address what happened to them as children. Recognizing this injustice, Governor Moore and the state legislature passed the Child Victims Act of 2023 in April, 2023 just days after the findings of the Attorney General were released.

The legislation, which went into effect on October 1, 2023, significantly changed the legal options for victims of childhood sexual abuse by providing them a clear avenue to seek justice and compensation from the Archdiocese of Baltimore and the Catholic Church. A key component of the new law eliminated the statute of limitations for Maryland childhood sexual abuse lawsuits, enabling survivors to pursue a claim whenever they are prepared to do so, irrespective of the time elapsed since the abuse.

However, days before the courts were expected to be flooded with new lawsuits, the Archdiocese of Baltimore filed for bankruptcy on September 29, 2023. This strategic decision has now resulted in a very short deadline for Archdiocese of Baltimore clergy abuse lawsuits to be filed, even though the new Maryland law intended to remove any cut off for claims.

Archdiocese of Baltimore Bankruptcy Deadline

According to the Archdiocese of Baltimore’s Chapter 11 bankruptcy filing (PDF), the organization’s assets are valued between $100 million and $500 million, and the church estimates it faces between $500 million to $1 billion in liabilities for acts of sexual abuse by Catholic priests and others associated with the church.

As a result of the bankruptcy filing, there was an “automatic stay”, which has prevented survivors from filing lawsuits in Maryland civil courts under the recently enacted Child Victims Act. Instead, all claims must be presented against the Archdiocese of Baltimore through the U.S. Bankruptcy Court for the District of Maryland.

As part of the bankruptcy proceedings, U.S. Bankruptcy Judge Michelle Harner designated a deadline for all claims to be filed against the Archdiocese of Baltimore, which now requires survivors of childhood sexual abuse to come forward by May 31, 2024.

The Archdiocese of Baltimore sexual abuse bankruptcy deadline is intended to allow the court to begin effectively assessing the total amount of claims and liabilities the organization faces. This is a common process in bankruptcy court proceedings, so the court and parties involved can begin creating a comprehensive plan to organize assets and pay claimants. However, it has also become a tactic used by defendants in large litigations to artificially limit the amount of time individual’s have to seek financial compensation for injuries they the organization caused.

How the Archdiocese of Baltimore Bankruptcy Filing Impacts Victims

In the face of growing civil lawsuits, particularly those centered around accusations of widespread sexual abuse in the Catholic Church, large organizations and corporations have historically turned to bankruptcy as a strategy to mitigate reputational damage and circumvent the victims’ ability to present their cases before a jury in trial courts.

This approach, which has now been pursued by the Archdiocese of Baltimore, has several implications for victims that stretch beyond just when, where and how they must files their claims for sexual abuse as a child. Typically, the bankruptcy process provides a far less transparent forum for these survivors of sexual abuse to seek justice and closure.

The court proceedings will primarily focus on the financial reorganization of the Archdiocese to ensure equitable distribution of available assets to all creditors, including abuse victims. Unlike the traditional civil procedure for abuse claims, this places the focus on the assets and liabilities of the Archdiocese rather than on the merit of the victims’ claims or providing a platform for their stories to be heard.

Furthermore, handling the increasing number of sexual abuse claims in bankruptcy court could provide the Archdiocese of Baltimore with reputational protections by limiting the amount of information that becomes public. Unlike a civil trial, where detailed testimonies and evidence are presented openly, bankruptcy court discussions can restrict the details that emerge. This controlled environment can prevent the public airing of detailed allegations and testimonies that could further harm the Archdiocese’s reputation.

Impact of Bankruptcy Court on Sexual Abuse Settlement Payouts 

In addition to side-stepping the intentions of the Child Victims Act to allow survivors the time they need to decide they are ready to come forward, the Archdiocese of Baltimore bankruptcy filing could also have significant impacts on settlement awards provided to claimants.

When the state of Maryland passed the Child Victims Act, one of the significant changes made to Maryland’s law was the increase in damages a victim could receive. Outlined in the Act, victims are now allowed to receive up to $1.5 million in non-economic damages for sex abuse claims against the Catholic Church and other private institutions.

With the claims now being forced to proceed through bankruptcy proceedings rather than traditional civil litigation, claims will not be assessed on their own merits in civil court. Rather, all claims are typically pooled together and addressed collectively through the bankruptcy process aimed at establishing a structured settlement, which could fail to fully account for the individual damages and suffering of each victim.

Currently, there are at least 136 claims registered on Roman Catholic Archbishop of Baltimore docket. While most of the individuals names have been suppressed, the claims against the Archdiocese of Baltimore are valued between $1,500,000.00 to $20,000,00.00.

However, the Archdiocese of Baltimore indicated in a statement on its website that proceeding through such bankruptcy proceedings is the best path forward for the Catholic Church to be able to emerge with its operations intact after compensating victims, stating;

“Chapter 11 reorganization is the best path forward to compensate equitably all victim-survivors, given the Archdiocese’s limited financial resources, which would have otherwise been exhausted on litigation. Staggering legal fees and large settlements or jury awards for a few victim-survivors would have depleted our financial resources, leaving the vast majority of victim-survivors without compensation, while ending ministries that families across Maryland rely on for material and spiritual support.”

Less than 100 Days Remain to File an Archdiocese of Baltimore Claim

While the recent tactics by the Archdiocese of Baltimore to seek apparent protections under the Chapter 11 Bankruptcy filing may pose challenges for victims, individuals are still coming forward to seek justice while the window in Maryland remains open until May 31, 2024.

At the time of the Archdiocese bankruptcy filing, it was estimated that hundreds of individuals were already registered as creditors against the diocese, with potentially thousands of additional claims still being reviewed by lawyers nationwide.

While no amount of money can ever truly compensate for the harm and suffering caused by sexual abuse, pursuing legal action can help survivors take back control of their lives and send a message that this type of behavior will not be tolerated.

Lawyers are continuing to provide free and confidential consultations to survivors who wish to learn more about their rights and whether they could be entitled to compensation through an Archdiocese of Baltimore sexual abuse lawsuit.