Montana Diocese to File Bankruptcy Protection Amid Sex Abuse Lawsuits

The Guardian
January 31, 2014

http://www.theguardian.com/world/2014/jan/31/montana-catholic-diocese-file-bankruptcy-sex-abuse-lawsuits

Roman Catholic diocese of Helena plans to file for bankruptcy protection Friday from two lawsuits alleging the church covered up sexual abuse by clergy members. Photograph: David Moir/Reuters

The Roman Catholic diocese of Helena planned to file for bankruptcy protection Friday in advance of proposed settlements for two lawsuits that claim clergy members sexually abused 362 people over decades and the church covered it up.

Diocese spokesman Dan Bartleson said the Chapter 11 bankruptcy re-organization will be filed Friday morning, and comes after confidential mediation sessions with the plaintiffs' attorneys, resulting in the deals to resolve the abuse claims.

The settlement details are being worked out, but the US Bankruptcy Court in Montana would be responsible for approving and supervising the disbursement of $15m to compensate the identified victims, plus an additional amount set aside for those who come forward later.

The victims and creditors will have the chance to vote on the proposed settlement, Bartleson said.

The plaintiffs' attorneys said they planned to release a statement later Friday.

The two lawsuits filed in 2011 claim clergy members groomed and then abused the children from the 1940s to the 1970s. They claim the diocese shielded the offenders and knew or should have known the threat they posed to children.

The plaintiffs, the diocese and the Ursuline Sisters of the Western Province began mediation talks in 2012, but the talks faltered with legal challenges by the church's insurers over the claims they are obligated to cover.

A court hearing was scheduled for Friday.

The diocese's territory covers all or part of 23 counties in western Montana and employs about 200 people in its parishes, schools and social-service programs. It was created in 1884, five years before Montana became a state, and covered the entire state until the Diocese of Great Falls was formed in 1904, according to the Helena diocese's website.

The Diocese of Great Falls-Billings now covers the eastern half of Montana.

The plaintiffs, the diocese and the Ursulines had pledged to work together to settle the lawsuits, and they have participated in three mediation sessions.

The diocese has filed claims with 16 insurers for its legal defense and the cost of the settlements. Several insurers have filed lawsuits challenging those claims, saying they should not have to pay damages for abuse that occurred before their policies went into effect.