This month, the dioceses of Albany and Oakland publicly acknowledged that they may soon file for bankruptcy protection. Last month, the diocese of Santa Rosa, California, actually took that step. A total of 31 Catholic entities are in or have sought Chapter 11 proceedings. Other large, popular, and powerful groups have done likewise, notably the Boys Scouts of America and USA Gymnastics.
It is a truism to say that the powerful and wealthy are able to carve out legal strategies to benefit themselves. It is a cruel irony, though, that Chapter 11 in the Bankruptcy Code perversely caters to the institutions that created the conditions for child sex abuse while it sidelines the victims.
Chapter 11 was designed for “honest debtors” to reorganize their businesses so they could leave their debts behind and successfully carry on. It is triage for the poor debtor, who is the “victim” in the bankruptcy…
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