Diocese of Duluth Files for Bankruptcy after $8.4 Million Judgment

By Ramona Marozas
Northlands News Center
December 7, 2015

http://www.northlandsnewscenter.com/news/local/Diocese-of-Duluth-files-for-bankruptcy-after-84-million-judgment-360821291.html

The Diocese of Duluth filed for chapter 11 bankruptcy following last month's court decision ordering the Diocese to pay $8.4 million to abuse victims, and Duluth's chapter is responsible to pay $4.8 million of that.

The Duluth Diocese says they have filed for an emergency basis for bankruptcy protection.

The Diocese will continue to operate during this bankruptcy process.

The Diocese shared this statement by Father James Bissonette, the vicar general of the Diocese, on behalf of the Organization:

"There is sadness in having to proceed in this fashion. After the recent trial, the Diocese again attempted to reach a mutually-agreeable resolution. Up to this point, the Diocese has not been able to reach such a settlement, and given the magnitude of the verdict, the Diocese was left with no choice but to file for reorganization. The decision to file today safeguards the limited assets of the Diocese and will ensure that the resources of the Diocese can be shared justly with all victims, while allowing the day-to-day operation of the work of the Church to continue. This decision is in keeping with our approach since the enactment of the Child Victims Act, which has been to put abuse victims first, to pursue the truth with transparency and to do the right thing in the right way."

The annual budget for the diocese is just over $3 million, not enough to pay out the all the victims who will come and collect their settlement.

Michael Finnegan with Jeff Anderson & Associates, who represents several sex abuse victims, says the Duluth diocese is the 15th Catholic diocese in the country to file for bankruptcy.

"They've all been resolved with a settlement with the survivors. So in all those cases, parishes have not been closed and the charitable works of the diocese or the religious order have not been impeded," said Finnegan.

The Duluth Diocese covers ten counties in Northern Minnesota, has 11 schools, and includes 57,000 Catholics.

Only the assets the Diocese owns directly will be affected.

Day to day operations of schools and churches would not be effected.

"It would be anything directly connected to the bishop like his house or it could be property that the diocese owns," said Father Bissonette.

Finnegan says the Bishop has had numerous chances to come forward with documents that detail the sexual abuse by priests in the diocese, with no plans of stopping.

"This effort and what happened today, the bankruptcy filing won't stop us from doing that, but it definitely delays us from doing that," said Finnegan.

Pending lawsuits will be put on hold during the bankruptcy process.

Lawyers say it could take one to two years to resolve.

The Diocese says they have been very transparent throughout the lawsuits and even published a list of priest who have been accused of sexual abuse.

Sex abuse survivors in Minnesota have until May 25, 2016 to come forward confidentially and bring a claim under the Minnesota Child Victim's Act.