In February, the diocese said it was just considering seeking bankruptcy protection, under a wave of claims alleging sexual abuse by clergy. Lawyers said Thursday the diocese will definitely file this fall.
The Roman Catholic Diocese of San Diego, under a siege of lawsuits from 438 people who say they were sexually abused by its clergy in past decades, said it plans to file for bankruptcy protection in November.
for bankruptcy and would likely make a decision by late spring. It would mark the diocese’s second time filing for bankruptcy. It did so in 2007, eventually settling 148 claims of sexual abuse for $198 million.The statements this week left no doubt that the diocese will seek protection under Chapter 11 of the bankruptcy code, which gives debtors time to reorganize their businesses, resolve debts and then restart their operation.
The law also contains a provision allowing a tripling of any monetary damages awarded if the organization was proved to have engaged in a cover-up. The dioceses say the potential payouts for the hundreds of claims they are facing would overwhelm them financially, and they need the sanctuary of the courts to work out resolutions.
In court papers filed for a hearing Thursday, Marcia Roberts, the lawyer for the diocese, said the organization “has made the final decision to file a petition for Chapter 11” in San Diego federal bankruptcy court and expected to do so the first week of November. Those cases, he argued, could serve as bellwether cases for the rest, setting a financial valuation that could be used to determine an overall settlement.
In addition to the pending trials and the bankruptcy proceedings, the diocese is facing legal woes on two other fronts.the diocese fraudulently transferred nearly 300 properties from its control to individual parish corporations in 2019, when Newsom signed the new law.
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