The two-century-old Archdiocese of Baltimore, the first Catholic diocese in America, has filed for bankruptcy, marking a historic event in the long, sad story of clergy sex abuse and coming on the eve of a new state law that would open the church to a flood of lawsuits.
Church lawyers filed bankruptcy papers Friday — even as plaintiffs’ attorneys were holding news conferences and writing their lawsuits for Sunday. That’s when Maryland’s statute of limitations lifts to allow new claims over old acts of abuse. The General Assembly passed the law in April.
Attorneys and survivors had planned dozens, if not hundreds, of lawsuits against the archdiocese. Bankruptcy halts the litigation.
Archbishop William E. Lori announced the bankruptcy with a letter to the archdiocesan email list of 120,000 people. In an interview with The Baltimore Banner ahead of the filing, Lori said church leaders weighed their options for months this summer before concluding Chapter 11 bankruptcy was inevitable. Whereas Chapter 7 bankruptcy liquidates a business, Chapter 11 aims to reorganize one.
“There’s going to be lots of lawsuits, more than our resources can handle,” Lori told The Banner. “Why not come to the table now? Why not get going? Why delay?
“Let’s enter a process that we think and hope and pray will be fair and equitable,” he added. “We just felt that now was the time.”
Dozens of dioceses around the country have filed for bankruptcy, and survivors of priest sexual abuse and their attorneys have condemned the move as a tactic to limit payouts and protect church secrets. Lori recognized the criticism, but he said the bankruptcy proceeding was the best course for two reasons.
First, he said, more survivors would be paid than if the archdiocese litigated cases one by one in state court. Second, he said, it’s the best chance for Baltimore’s Catholic schools, parishes and charities to stay open. The archdiocese employs about 200 people at its downtown office alone.
“If we were to litigate the first few lawsuits that were filed, that would exhaust our resources and we would have little or no ability to assist many other people,” Lori said. “Our desire was to do this as equitably as we can.”
The archdiocese reports on its website nearly $250 million in assets and $121 million in liabilities.
Lori also acknowledged the bankruptcy proceedings may take two to three years to conclude. He hopes the process brings not only financial stability, he said, but healing and closure for survivors and the church.
“My hope is, first and foremost, that the victim-survivors could see this as a process that has been of help to them. Secondly, I would pray that the archdiocese would not simply see this as a legal process that we have gotten through, but that we would emerge through it purified spiritually.”
Some survivors and their attorneys have said they will try and block the move. A bankruptcy judge could consider the filing premature and order the church to wait, experts say.
The story continues at the Baltimore Banner: Archdiocese of Baltimore files for bankruptcy ahead of expected flood of sex-abuse lawsuits
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