SAN FRANCISCO (CA)
Insurance Business America [Englewood CO]
August 27, 2025
By Kenneth Araullo
Carriers argue lifting the pause could unfairly prioritize select cases
A group of insurers is urging a California federal court to keep a stay in place on five lawsuits connected to sexual abuse claims and the bankruptcy of the Roman Catholic Archdiocese of San Francisco.
The archdiocese filed for Chapter 11 bankruptcy in August 2023, citing the need to address more than 500 lawsuits alleging child sexual abuse. According to a statement from the religious organization, the bankruptcy filing automatically paused all legal actions related to the abuse claims while a reorganization plan is developed.
This plan would be based on the archdiocese’s assets and insurance coverage and is intended to resolve the abuse claims.
The insurers, including affiliates of Chubb Ltd., argue in an objection filed with the United States Bankruptcy Court for the Northern District of California, San Francisco Division, that the five cases selected from hundreds of pending lawsuits are not representative. They contend that allowing these cases to proceed would not advance a global resolution and would give preference to those five plaintiffs over others with similar claims.
The carriers state that the selection of these cases was made by the archdiocese and a committee without insurer input, even though insurers would be responsible for paying any resulting judgments.
The insurers further argue that permitting the test cases to move forward would conflict with bankruptcy rules requiring equal treatment of all claimants. They point to the bankruptcy proceedings of the Diocese of Oakland, where a judge determined that state court judges should select bellwether cases through a process that includes input from all interested parties.
While the carriers acknowledge their concerns with that process, they emphasize that it is more neutral than the current approach.
Similar settlement proceedings
In similar bankruptcy cases involving Catholic dioceses, parishes and affiliated charities have been required to contribute substantial amounts to settlements.
For example, in the New Orleans Archdiocese case, 104 parishes and 19 charitable organizations were required to pay $60 million toward a $180 million settlement. These assessments are typically based on each entity’s financial situation, with court documents outlining how contributions are determined and distributed among the participants.
In the New Orleans case, the bankruptcy judge set a deadline for ending the proceedings and required parishes and charities to provide their share of the settlement within six months of plan confirmation.
This approach has led to concerns among some parishes in other dioceses, who have argued that the required payments could be “catastrophic” and have sought legal relief to avoid closure. The financial impact on local parishes varies, with some facing significant challenges in meeting their obligations.
If the court decides to lift the stays, the insurers are asking for the authority to select the cases and to control the defense in those matters. They also request that coverage issues be litigated alongside pretrial and stayed declaratory relief actions.
Additionally, the carriers want the court to delay lifting the stays until a coverage court can determine whether they have the right to control the defense for cases where they may be solely responsible for paying judgments.
The insurers are also seeking to prevent the archdiocese from issuing demand letters in stayed cases, arguing that such actions are attempts to create extracontractual liability. The court has not yet ruled on the insurers’ requests.