OAKLAND (CA)
The Mercury News [San Jose CA]
November 9, 2024
By Jakob Rodgers
The proposal comes the church faces hundreds of lawsuits alleging decades of sexual abuse
The Diocese of Oakland this week proposed creating a trust worth at least $117 million to help settle hundreds of lawsuits alleging decades of sexual abuse by its priests, in a deal that victims’ attorneys immediately labeled “pathetic.”
The diocese’s proposed payout highlighted a reorganization plan it filed late Friday to emerge from Chapter 11 bankruptcy and settle roughly 350 lawsuits from people claiming to have been abused by the Catholic church’s leaders. The trust would be funded over the course of several years and include the title to a Livermore property the church says could add tens of millions of dollars in value to the victims’ trust.
Attorneys for the sexual assault victims called the plan “a scam and a sham” on Saturday, alleging the diocese undervalued its assets as a means to avoid paying more. If approved, the payout would be less than an $880 million settlement reached last month between the Archdiocese of Los Angeles and more than 1,350 people who sued church leaders in Southern California.
“It’s what we call a cram-down plan,” said Rick Simons, an attorney for numerous sexual assault victims and co-liaison counsel for the clergy abuse cases in Northern California. “They are trying to cram down the plan into the throats of the survivors, without the survivors’ agreement or approval, because they refused to negotiate a fair plan and want to try to save money.”
“It’s a ridiculous effort to hide their assets and just not pay their debts as part of their reorganization,” Simons added. “Their amounts are pathetic.”
In a statement posted to its website, the Diocese of Oakland said the plan offered “just and equitable compensation,” while suggesting the trust’s value could grow between $43 million and $81 million when accounting for its perceived value of the Livermore property’s title. In addition, the diocese proposed giving all the rights and interests of its insurance policies to the trust, which could allow victims of abuse to seek money from the diocese’s insurers.
“We recognize that no amount of money can fully and satisfactorily compensate survivors for the abuse they suffered,” Bishop Michael C. Barber said in the diocese’s statement. “Bearing that in mind, we believe the plan compensates survivors in a fair and equitable way and allows the Diocese of Oakland to set a path forward to continue to spread the Gospel, serving the faithful and the poor.”
The proposed settlement comes amid a flood of lawsuits made possible by a recently-closed, three-year filing window, which catered to cases that had expired due to the statute of limitations. Many of the lawsuits alleged abuse going back decades against priests who were allegedly allowed to victimize parishioners with impunity.
Just months after that special-filing window closed in late 2023, the diocese responded by filing for Chapter 11 bankruptcy protection. The move drew immediate condemnation by the abuse victims and their attorneys, whose lawsuits were effectively paused while a bankruptcy judge reviewed the church’s finances and assets.
The bankruptcy filing amounted to “another form of cover up,” said Dan McNevin, an Alameda County survivor of abuse, when the church initially made its filing in May. His lawsuit against the church roughly 20 years ago was among 56 that settled for an average of $1 million — an amount dwarfing the diocese’s most recent proposal, particularly when accounting for inflation.
The filing on Friday included the creation of a “Survivor’s Trust,” which would include $103 million in cash directly from the diocese, as well as $14.25 million from the Roman Catholic Welfare Corporation/Schools. It also included the Livermore land title, which would be transferred “on an as-is, where-is basis.” The property was once envisioned as the site of a high school, but now sits vacant.
The trust would be funded in installments over several years, beginning with an initial installment of about $65 million and growing by $10 million to $13 million for the next several years.
The plan was filed on the final day the diocese had the exclusive right to file a plan of reorganization with the bankruptcy court, the diocese said. In its statement Friday, the diocese said it would “obtain a loan, use cash resources and sell real estate,” but gave few other details.
“We are hopeful the survivors nonetheless recognize the Diocese is working in good faith to try to compensate them fairly and equitably,” said Barber, in an October note to parishioners.
The abuse victims’ attorneys, however, suggested that not funding the trust immediately would short-change people who had already been victimized by the church, given how the value of that trust could erode with time and inflation. And they questioned whether the church was being fully transparent in its financial accounting.
The attorneys also suggested the church could do more to sell off its considerable real estate holdings throughout the region, the value of which vastly surpasses the proposed settlement amount. One place to start would be selling dozens of parishes that appear to be without priests, said Jeff Anderson, an attorney representing more than 100 victims.
“They’re prioritizing their own interests over that of the children that they harmed,” added Jennifer Stein, an attorney for numerous victims. “We believe they have the ability to pay significantly more, and they continue to choose their own interests above that of their former students, former parishioners — the very Catholics and community that they were serving, and that they continue to serve.”