March 09, 2005

Newfoundland diocese seeks bankruptcy protection from abuse claims

Catholic News Service

By Catholic News Service

CORNER BROOK, Newfoundland (CNS) -- The Diocese of St. George's has become the first Catholic diocese in Canada to seek bankruptcy protection as a result of sexual abuse claims.

Bishop Douglas Crosby of St. George's announced March 8 that his diocese took the action to help it come up with money to stave off bankruptcy threatened by $50 million in claims. The bishop said that by going into bankruptcy protection the diocese could develop a plan that would compensate the victims better than if it went bankrupt.

The stay of proceedings requested by the diocese lasts 30 days and can be extended at the court's discretion. During that time, the diocese is expected to develop a proposal for creditors. If the creditors, including the sex abuse claimants, refuse to accept it, the diocese will be automatically bankrupt, and a trustee will be appointed to liquidate its assets.

A year ago, the Supreme Court of Canada ruled that St. George's Diocese was directly and vicariously liable for claims by 36 individuals. These claims flow out of the case of Kevin Bennett, a former priest of the diocese who was sentenced in 1990 to almost 20 years in prison for sexually abusing young men over a period of two decades. Bennett served four years in prison.

Posted by kshaw at March 9, 2005 05:39 PM