The diocese had asked District Judge C.H. Pelton to postpone the trials by 30 days so it could work further with insurance companies to reach settlements on behalf of about 40 people.

But Pelton ruled the diocese had 17 months to recognize and resolve insurance company disputes rather than two weeks before the first trial, which is scheduled to begin Nov. 1.

“These circumstances certainly are not a surprise or an unanticipated event,” Pelton wrote in his ruling. “Whether or when the diocese seeks bankruptcy protection is an issue for the diocese, not for the state trial court.”

The diocese had argued that it only received the total amount of monetary demands from claimants last month.

Bishop William Franklin issued a news release Thursday afternoon stating that the diocese will continue settlement negotiations in good faith, but the ruling eliminates one alternative to bankruptcy.

“The diocese believes that there may not be sufficient time to negotiate with the claimants and its insurance company before the trial date,” he said.

The diocese has said it will either settle the cases or file for bankruptcy “on or about” today, but it will not allow the first lawsuit to go to trial because that could exhaust the diocese’s assets, leaving nothing for later claimants.

Craig Levien, the attorney who represents at least 37 men with claims against the diocese, said the diocese told him its corporate board will meet Monday to discuss the negotiations.

Still pending are requests the diocese made to the Iowa Supreme Court in which it asked the trials to be put on hold until it considers an appeal of Pelton’s decision not to throw out the cases on statute-of-limitations issues.

Pelton’s Thursday afternoon ruling encouraged attorneys on both sides to continue negotiations.

While the diocese says the financial demands of the claimants exceed its $10 million in assets, Levien says the diocese has adequate assets.

“I’m still waiting for the responses from them,” he said. “I don’t think it’s significant enough of a difference that it would ever justify the diocese going into bankruptcy.”

Both sides have agreed to keep confidential the monetary and non-monetary demands of the claimants as well as the offers made by the diocese.

Franklin requested Thursday, as attorneys for the diocese did in a Clinton County District Court hearing Wednesday, that Levien agree to drop the confidentiality provision.

“The diocese believes that its people have a right to know how much the diocese has offered in settlement in an attempt to avoid bankruptcy,” Franklin said in the news release.

Levien continued to balk at that idea, saying the diocese would understate its assets and that its offers would appear misleadingly good.

The diocese has denied his attempts to independently investigate its assets, he said, so a disclosure by the diocese of its offers could “further depict the victims as being greedy.”

“The best way to attempt to settle is meetings between attorneys,” Levien added.

The diocese faces 15 lawsuits and at least 22 other claimants alleging sexual abuse dating to the 1950s.

A bankruptcy filing would put a hold on trials against the diocese and move the claims to bankruptcy court. The plaintiffs could request that the lawsuits be brought back to state court.

Among 195 Catholic dioceses and archdioceses across the nation, only the Portland Archdiocese and Tucson Diocese have filed for bankruptcy after paying sexual abuse settlements in the millions of dollars resulting from cases involving priests.

Todd Ruger can be contacted at (563) 383-2493 or truger@qctimes.com.