BishopAccountability.org
	Facing Mounting Lawsuits, Catholic Dioceses Turn to Bankruptcy The Economist February 10, 2011 http://www.economist.com/node/18114701?story_id=18114701&fsrc=rss FOR the archdiocese of Milwaukee, the past looms large. Its main office is the Cousins Centre, named after William Cousins, archbishop from 1959 to 1977. The cathedral’s pastoral office is the Weakland Centre, after Rembert Weakland, archbishop from 1977 to 2002. Victims allege that both men knew that certain priests had a history of molesting boys, yet failed to act or simply transferred the priests elsewhere. Last month the past caught up with the present: the archdiocese, besieged by lawsuits, filed for bankruptcy. The creditors’ committee is due to hold its first meeting on February 11th. Since 2002, when scandal erupted in Boston, more and more victims have sued the Roman Catholic church. As the number of suits has risen, so too has the number of dioceses seeking the protection of bankruptcy. Portland was the first diocese to file, in 2004; Milwaukee is the eighth. Each case is different. All are difficult. Milwaukee has a particularly tortured history. It has been rife with scandal—a Father Lawrence Murphy was alleged to have abused some 200 deaf students, for example, and a convicted priest was sent to work with children in California. Yet civil suits have only recently proved successful. Plaintiffs in other states have charged the church with negligent supervision of priests, but this argument found little traction in Wisconsin’s courts. Victims made progress, at last, in 2007. The archdiocese, plaintiffs claimed, had committed fraud in the 1970s and 1980s by misrepresenting such priests to future victims. The state Supreme Court let that claim stand. A wave of lawsuits followed and, on January 4th, the archdiocese filed for bankruptcy. The filing puts all the suits on hold. Jeff Anderson, the plaintiffs’ lawyer, argues that the bankruptcy was timed to avoid an embarrassing trial. “It is part of a pattern,” says Mr Anderson, who has brought hundreds of suits against various bits of the church, including one against the Vatican. The archdiocese says this is nonsense. Bankruptcy will simply allow it to deal with creditors equitably and settle claims more quickly than in a trial. But the bankruptcy will hardly be speedy. All bankruptcies are complex, but those for a church are much more so, explains Jonathan Lipson, a law professor at the University of Wisconsin, Madison. Financial statements filed in the bankruptcy court on February 7th presage fights to come. The archdiocese presented $40.7m in assets, compared with $98.4m in its financial report last year. The discrepancy, the archdiocese says, is because certain assets are held in restricted trusts, largely for the care of cemeteries. Plaintiffs may view this differently. Pension liabilities present another complication for the bankruptcy judge, as religious groups are exempt from many federal pension rules. Yet the biggest fight may well be over parishes and schools. These are separately incorporated, the archdiocese contends, so their assets are protected. But the plaintiffs may argue otherwise—or simply sue the parishes themselves. All this may drag on for years. But Peter Isely, of the Survivors Network of those Abused by Priests, remains hopeful. Bankruptcy, he says, will encourage victims to come forward and may eventually force the truth from the archdiocese. In Delaware, where a diocese filed for bankruptcy in 2009, a recent settlement included the release of internal church documents. Mr Isely repeats the refrain of many advocates for those who were abused. “Every victim”, he insists, “has a right to know what bishops knew, when they knew it and what they did about it.”
Any original material on these pages is copyright © BishopAccountability.org 2004. Reproduce freely with attribution.