Diocese to File for Bankruptcy
By Kevin Parrish
[with video] STOCKTON - The Catholic Diocese of Stockton will take the "painful but necessary" step of filing for bankruptcy Wednesday. Four months after warning parishioners of the possibility, the diocese announced Monday that it will seek Chapter 11 protection. About the diocese.The Roman Catholic Diocese of Stockton covers six counties: San Joaquin, Stanislaus, Calaveras, Tuolumne, Alpine and Mono.It covers 10,023 square miles with 1.3 million residents. The Catholic population is 250,000, or about 20 percent of the total. Eighty-eight priests serve in 35 parishes and 14 missions. The diocese is geographically and ethnically diverse. The majority of the population lives in the San Joaquin Valley; Stockton is the largest metropolitan area. Many of the parishes date to the Gold Rush era. The largest ethnic groups are white and Latino. Bishop Stephen Blaire said the decision was the only course open to the diocese in the wake of $32 million spent on settlements and judgments stemming from a rash of child sexual-abuse lawsuits over the past two decades. Of that total, $14 million came directly from the diocesan budget, the balance from insurance companies. Blaire estimated an addition $1 million had been spent in legal fees. Stockton will be the nation's 10th diocese to file for federal bankruptcy court protection. "Very simply, we are in this situation because of those priests in our diocese who perpetrated grave, evil acts of child sexual abuse," the 72-year-old Blaire said. "We can never forget that those evil acts - not the victims of the abuse - are responsible for the financial difficulties we now face." The bankruptcy filing will take place in Sacramento at the U.S. District Court for the Eastern District of California, the same place the city of Stockton filed its Chapter 9 debt-adjustment plan 18 months ago. Blaire said the diocese's financial resources have been depleted and, with two legal cases pending, he and the diocese's lawyers saw no other course open to them. Two additional lawsuits could be filed. "I don't know how we could resolve this without the bankruptcy process," he said. "It is a very difficult thing. I never thought along these lines. It has forced us to take a look at everything we do, from how we are organized to the whole financial picture." He also pointed out that the diocese's administrative arm - a $5 million-a-year operation - is the only entity seeking protection. A decade ago, the diocese split off its other corporations, the individual parishes, the Catholic schools and other organizations. The Survivors Network of those Abused by Priests was quick to respond to the Stockton Diocese announcement. "A bishop declaring bankruptcy is a convenient, self-serving dodge," said Newport Beach resident Joelle Casteix, Western regional director of the group. "Despite this irresponsible decision, we hope that others who saw, suspected or suffered from clergy sex crimes and cover-ups in Stockton will step forward, call police, expose wrongdoers and protect kids." Blaire said he expects that to happen. "During this procedure (in federal bankruptcy court), there will be a sufficient period of time for other victims to come forward," he said. Blaire, bishop since 1999, said he tried to be transparent in the weeks leading up to the announcement and said he welcomes further openness and scrutiny. "This is painful but necessary," Blaire said. "You have to make sure everything in your house is in order. But I've come to see the positive value. "I am convinced this step will allow us to achieve two essential goals: First, it will provide a process to compensate as fairly as possible the victims of sexual abuse, including those who have not yet come forward or had their day in court. At the same time, the process will provide a way for us to continue the ministry and support we provide to the parishes, the poor and the communities located within our diocese." He also estimated that the legal proceedings will take 11/2 to two years to conclude. Blaire, chairman of the U.S. bishops' Committee on Domestic Justice and Human Development, said he expected to see bankruptcy through to its conclusion. By canon law, Catholic bishops must submit their resignations to the pope at age 75 - three years away for Blaire. "I never want to lose sight of the fact," Blaire said, "that the acts of sexual abuse committed by priests betrayed the trust people have placed in us and have inflicted severe damage on innocent lives." Contact: kparrish@recordnet.com
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