Wilmington diocese filed for Chapter 11 bankruptcy protection over the weekend after negotiations with attorneys representing abuse victims broke down. The diocese became the seventh in the United States to seek bankruptcy protection and its filing came one day before the scheduled start of a civil trial against a defrocked priest, Reuters reports.
"This is a painful decision, one that I had hoped and prayed I would never have to make. However, after careful consideration and after consultation with my close advisors and counselors, I believe we have no other choice, and that filing for Chapter 11 offers the best opportunity, given finite resources, to provide the fairest possible treatment of all victims of sexual abuse by priests of our Diocese.
"Our hope is that Chapter 11 proceedings will enable us to fairly compensate all victims through a single process established by the Bankruptcy Court, Bishop Malooly said.
"It has always been my and my predecessor, Bishop Saltarelli's, highest hope and fervent desire to settle all claims against the Diocese of Wilmington through a mediation process.
"Our past record as detailed in my May 7, 2009, letter outlines the number of past cases we have settled and the aggregate amount of money the Diocese has paid in settlements. Some months ago, we petitioned the Superior Court to order an Alternative Dispute Resolution process so that a global, equitable settlement for all 142 claimants would be negotiated with the assistance of a court-appointed mediator.
"On October 6 the court ordered such an ADR process for all cases without long-standing trial dates. Thirty of the 131cases filed against the Diocese have been scheduled for trial, with a set of eight cases to begin trial on Monday, October 19.
"As has been our policy, we were engaged in negotiations, with the assistance of a mediator, to settle these eight cases. These negotiations continued until today, but we were unable to achieve a settlement.
"Our concern throughout the negotiations was that too large a settlement with these eight victims would leave us with inadequate resources to fairly compensate the other 133 claimants, and continue our ministry. It is our obligation to ensure that all victims of abuse by our priests are fairly compensated, not just those fortunate enough to secure earlier trial dates.
"The Chapter 11 filing is in no way intended to dodge responsibility for past criminal misconduct by clergy - or for mistakes made by Diocesan authorities. Nor does the bankruptcy process enable the Diocese to avoid or minimize its responsibility to victims of abuse. Instead, the Chapter 11 filing will enable the Diocese to meet its obligations head-on and fulfill its responsibility to all victims.
"The Diocese of Wilmington is committed to pursuing the truth because truth heals.
"Moreover, the Diocese has never sought to seal depositions of priests accused of sexual abuse, and it consistently has supported the unsealing of such records. The Diocese also has never sought to seal the priest files it has produced in discovery in the lawsuits. The Diocese itself has publicly corroborated many of the incidents of abuse, and has provided more details about what actions were taken - or, sometimes tragically, not taken - by our officials. All such information is in the court records of the cases scheduled for trial on October 19, and we believe that no significant new facts would have emerged at trial," Bishop Malooly said.
In the filing with the U.S. Bankruptcy Court for the District of Delaware on Sunday, the diocese listed estimated assets of $50 million to $100 million and estimated liabilities of $100 million to $500 million.
The bankruptcy filing automatically delays the case in Kent County Superior Court, the first of eight consecutive abuse trials scheduled in Delaware, AP says.
Monday's case would have been the first to come to trial under a Delaware law that created a two-year "lookback" window that allowed claims of abuse to be brought regardless of whether the statute of limitations had expired. More than 100 lawsuits were filed before the period ended this summer, with four being settled.
Thomas Neuberger, an attorney representing 88 alleged victims, described the bankruptcy filing as a "desperate effort to hide the truth from the public and conceal the thousands of pages of scandalous documents" from being made public in court.
"This filing is the latest, sad chapter in the diocese's decades long 'cover-up' of these despicable crimes, to maintain the secrecy surrounding its responsibility and complicity in the sexual abuse of hundreds of Catholic children," Neuberger said in a statement, AP says.
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