The Impact of California Diocese Bankruptcies on Survivors

Recently, three California Catholic dioceses, San Diego, Sacramento, and Oakland, have released statements saying that they are considering filing for Chapter 11 Bankruptcy. Additionally, the Diocese of Santa Rosa officially filed for bankruptcy on Monday, March 13th. The reason for filing, or potentially filing, according to the bishops? The hundreds of survivors who have come forward to seek justice and accountability under AB 218, the California Child Victims’ Act, for crimes committed against them as children.


Why are they doing this?

The core reason that Catholic bishops file for Chapter 11 Bankruptcy: to hinder the public from learning of the magnitude of clergy sex abuse and the cover-up of the crimes committed. The more public awareness, the more accountability and transparency will be demanded. Bishops want to stall the justice process, keep evidence and information hidden, discourage other survivors from coming forward, and continue “business as usual.” Filing for Chapter 11 Bankruptcy helps accomplish this strategy. Fortunately, attorneys for survivors have decades of experience in dealing with this tactic. So now, more than ever, the needs and rights of survivors can be protected and additional child protection measures can be instituted to help keep children safe from abuse.


Does this mean the diocese has no money?

No. Chapter 11 Bankruptcy is a clever legal tactic for organizations with plenty of money and assets to “reorganize” and continue with “business as usual” while stalling the civil justice process for survivors. The ones who pay the ultimate price for bankruptcy are the survivors.


What happens now?

Once a diocese files the Chapter 11 Bankruptcy paperwork, the claims against that diocese move to the Federal Bankruptcy Court; survivors become “creditors” of the “debtor” (diocese). If a sex abuse trial is looming, it is immediately halted. If discovery (the exchange of information and evidence in a case) is ongoing, that process is suspended. If you are a survivor from a diocese or religious order that has filed for Chapter 11 Bankruptcy, talk to your attorney for complete information on the status of your case and the rights you may have through the Bankruptcy Courts.


What does this mean for survivors?

If you already have a case against a diocese that has filed for bankruptcy, keep in contact with your attorney. If you were sexually abused in a diocese that has declared bankruptcy, the bankruptcy judge will set what is called a “bar date.” That bar date is a deadline for anyone who may have a claim against the diocese to file a claim. Immediately contact an attorney to determine your rights, what action you can take, and how you can expose abuse and those who were complicit in allowing it to occur.


Will bankruptcy allow the bishops to keep evidence hidden?

In previous bankruptcies involving Catholic institutions, survivors have successfully forced the disclosure of documents and files pertaining to child sexual abuse and crimes committed.


Will other dioceses in California declare bankruptcy?

We cannot predict what other dioceses will do, but we can say that no matter what a bishop decides, we will work hard to make sure that survivors receive the justice and healing they so rightly deserve.