First Catholic Diocese in Pennsylvania Declares Bankruptcy
February 19 2020 - 3:10PM
Dow Jones News
By Ian Lovett
The Catholic Diocese of Harrisburg filed for bankruptcy
Wednesday, making it the first in Pennsylvania to seek chapter 11
protection after the state attorney general released a grand-jury
report detailing decades of clergy sexual abuse of children.
Since that report, which included more than 1,000 cases of
clergy abuse dating to the 1940s, the state has received hundreds
more reports from people claiming they were abused by priests.
In addition, attorneys general in more than a dozen other states
have opened investigations into Roman Catholic dioceses, and a
handful of states have changed statutes of limitations laws to make
it easier for people who say they were abused by clergy many years
ago to sue. Pennsylvania hasn't taken such a step
However, a state appeals court ruled last year that a case
accusing the Altoona-Johnstown diocese of a conspiracy to cover up
abuse could go forward, despite the statute of limitations. The
case is on appeal, but in the meantime similar cases have been
filed all over the state, including in Harrisburg.
"That was a game-changer for us," said Matthew Haverstick, a
lawyer representing the Harrisburg diocese.
In its bankruptcy filing, the diocese estimated its financial
liabilities at between $50 million and $100 million and its assets
at no more than $10 million. The diocese has at least 200
creditors, according to the filing.
Like six of the seven other dioceses in Pennsylvania, Harrisburg
has a program to financially compensate alleged victims of abuse.
By the end of last year, it has paid out more than $12 million to
110 alleged victims, the lawyer said. Those who accepted
settlements are barred from suing the church.
Such programs are designed in part to limit dioceses' legal
costs. However, membership and collections have been shrinking for
years in Harrisburg, as in many other northeastern Catholic
dioceses, Mr. Haverstick said, increasing financial pressure.
Harrisburg is the 21st Catholic diocese nationwide to file for
bankruptcy since 2004, when sexual-abuse lawsuits against the
church began to mount.
Terry McKiernan, of the watchdog website Bishop Accountability,
said the bankruptcy was another result of the attorney general's
report in 2018. "Catholic dioceses over the years have used
bankruptcy as a way of controlling" the costs of sexual abuse
lawsuits, he said. "It's a strategy."
With jurisdictions around the U.S. taking steps to make it
easier for alleged victims of abuse from decades ago to sue, Mr.
Haverstick said he expected many other dioceses would soon follow
Harrisburg into bankruptcy. The Diocese of Rochester filed for
bankruptcy last year, shortly after a New York state law that
temporarily lifted the statute of limitations on child sexual abuse
took effect. The Boy Scouts of America, which has also faced a
flood of sexual- abuse lawsuits in recent years, filed for
bankruptcy Tuesday.
"This is the beginning of a trend for the Catholic church and
for nonprofit charities," Mr. Haverstick said. "Just like
investigations after the Pennsylvania report started to run across
the country, I think the next thing that will spread across the
country is diocesan bankruptcies."
Write to Ian Lovett at Ian.Lovett@wsj.com
(END) Dow Jones Newswires
February 19, 2020 14:55 ET (19:55 GMT)
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