EL PASO (TX)
KFOX-TV, Ch. 14 [El Paso TX]
March 6, 2026
The Catholic Diocese of El Paso has filed for Chapter 11 bankruptcy protection, citing mounting financial pressure from clergy sexual abuse litigation and ongoing operating deficits, according to a court declaration filed by Chief Financial Officer Gregory J. Watters.
The filing, submitted to the U.S. Bankruptcy Court for the Western District of Texas, outlines the Diocese’s financial challenges and requests court approval to maintain operations and borrow new money.
Church officials said the primary reason for the bankruptcy filing is the financial strain caused by clergy sexual abuse claims.
The Diocese currently faces 18 plaintiff claims in 12 pending lawsuits in New Mexico related to allegations of sexual abuse of children by the hands of clergy that happened between 1956 and 1982.
Leaders warn that legal defense costs and potential settlements could reach tens of millions of dollars—far exceeding the Diocese’s available finances.
During a news conference Friday, Bishop Mark Seitz said the decision to file for bankruptcy came after the number of claims against the diocese grew.
“But suddenly the number of claims ballooned up to 18 claims, 12 separate lawsuits, and doing the math it just became obvious that there was no other option for us to pay the claimants,” Seitz said.
Without bankruptcy protection, officials said, early claimants could receive compensation while later survivors might receive nothing, a scenario the Diocese hopes to avoid through an orderly reorganization process.
Seitz said the Chapter 11 filing was necessary because the financial demands of the lawsuits exceed what the diocese can afford.
“Chapter 11 reorganization was the most prudent course of action because there are now financial claims pending against the diocese that exceed our means,” Seitz said.
The Diocese stated that, if the bankruptcy is approved, as part of the reorganization plan, the Diocese will propose a 120-day period for any outstanding claims to be made regarding abuse by clergy, employees, or volunteers of the Diocese.
The Diocese said it believes that this will encourage anyone with claims, including sex abuse, who have not yet identified themselves to come forward so they can share in the resources that will be made available during the reorganization process.
In a new release, Rev. Mark J. Seitz, Bishop of El Paso, released the following statement:
As your bishop, I apologize to abuse survivors for the harm, pain and suffering they experienced and continue to experience in their lives.
It is my prayer that through this process we can reconcile with each other and walk together towards the loving presence of Jesus Christ in our midst.
The Diocese of El Paso is committed to maintaining a safe environment where every person is protected as a valued member of our Catholic communities.
We will also maintain open lines of communication to abuse survivors as an ongoing ministry of the Church and we will remain vigilant in upholding the policies and practices that have been implemented to keep children safe.
Seitz also addressed the filing in a YouTube video posted on the Diocese’s account.
In the video, Seitz explains that “several months ago,” lawyers representing the Diocese sat down with the “abuse survivors” and their lawyers to talk and reach an agreement before the filing.
Seitz described the meetings as “candid, transparent and fruitful,” citing that they had reached “resolutions” on many of the issues, saying that the goal was to “make this process less contentious and painful for abuse survivors and all involved.”
Below you can watch the full video: https://www.youtube.com/embed/14Sq3M9co7o
According to the Diocese, it is not aware of any reported incidents of sex abuse of children by clergy happening after 1998.
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The Diocese has struggled financially for years.
For the fiscal year ending June 30, 2025, it reported approximately $15.36 million in expenses against $14.96 million in revenue, resulting in a net loss of about $401,700.
Officials described the Diocese as a “Mission Diocese” that relies heavily on donations, parish assessments, and limited grants, which have not kept pace with operating costs.
Furthermore, roughly 25% of the Diocese’s assets are restricted by donors for specific purposes and cannot be used to pay legal claims or general debts, limiting available funds for settlements.
In its filing, the Diocese asked the court to allow continued payment of employee wages, insurance premiums, utilities, and other critical expenses.
Officials said any interruption in these services could disrupt religious, educational, and charitable programs across the Borderland region.
The Diocese employs 47 lay staff and four priests, with monthly payroll obligations of approximately $148,700.
It also maintains insurance coverage for church properties, schools, and ministries, and pays roughly $1.48 million annually for insurance programs that protect facilities and personnel.
Church leaders said Chapter 11 provides the best path to compensate abuse survivors while preserving ministries, schools, and charitable services relied upon by communities throughout the region.
“Without Chapter 11 protection, adverse judgments could exhaust our assets and force immediate cessation of operations,” Watters stated in the declaration, urging the court to approve the Diocese’s initial requests to maintain normal operations during the bankruptcy process.