A U.S. judge is allowing victims of the Archdiocese of Baltimore to individually sue the church, even though the organization filed for bankruptcy.
For more than a year and a half, victims have been prohibited from suing the church, and instead forced to go through the bankruptcy process, which involves filing a claim and waiting for mediation to resolve what the archdiocese can pay out.
However, recent changes to Maryland’s Child Victims Act have complicated that process and necessitated a decision from U.S. Bankruptcy Judge Michelle Harner.
Under the original law, victims would be able to bring a case against their alleged abuser at any time and receive up to a $1.5 million payout. That would have been the option for victims if the bankruptcy negotiations failed and victims had to file suit outside of the bankruptcy proceedings.
A breakdown in bankruptcy negotiations is rare, but not unheard of said Phil Federico, a partner at Brockstedt Mandalas Federico, which represents victims.
“Historically, when there is not a good faith effort on the part of the bankrupt or insurance companies involved with the bankrupt to resolve cases, the court has that option, and courts have done it before,” Federico said. “That is a very real possibility, because there certainly is precedent for it.”
However, confusion ensued when the Maryland General Assembly last month voted to change the Child Victims Act. The amendment to the law reduced the maximum of what survivors can receive from public institutions from $890,00 to $400,000.
It limits the cap on private institutions from $1.5 million to $700,000.
It also caps fees for attorneys at 20% for cases settled out of court and 25% for cases that go to trial.
But, cases that are filed before June 1 will not be subject to the new caps. That’s where Harner’s decision comes into play.
“What the judge said is “Look, I'm going to lift the automatic stay as to the Archdiocese of Baltimore, and you can file those cases, but once you have a lawsuit pending, the bankruptcy will continue,’” said Robert Jenner managing partner at Jenner Law.
The cases will not go forward unless bankruptcy breaks down, but if it does, then the victims will be entitled to the maximum payout before the new caps go into effect.
Jenner described the work as a “herculean” task as law firms are trying to field all sexual abuse cases, even from outside the church, before the deadline passes.
“The lawyers will do it, because they have to do it,” Jenner said. “But it's no small feat.”
The Archdiocese of Baltimore did not respond in time to a request for comment on this article.