Stockton Diocese reorganization approved
The Catholic Diocese of Stockton has made a major step this week in recovering from bankruptcy after having to pay legal costs relating to several child sexual abuse lawsuits.
The U.S. Bankruptcy Court for the Eastern District of California has approved the Roman Catholic Bishop of Stockton’s consensual plan of reorganization. It was also nearly unanimously approved by the sexual abuse survivors and other creditors, according to a press release from the Stockton Diocese.
In the reorganization plan, the Diocese would provide $15 million through cash contributions and a promissory note to fund a trust for the benefit of clergy sexual abuse survivors. They would also give a payment of at least 50 percent of what is owed to general unsecured creditors and restructure secured loans. Funding for the plan will come from settling with insurance carriers and other entities associated with the Diocese of Stockton.
The diocese filed for Chapter 11 bankruptcy on Jan. 15, 2014. Bishop Stephen Blaire previously told the NewsSentinel that the diocese had paid more than $14 million in legal settlements and judgments to more than 30 victims over the last 20 years. Total payments, including those from insurers and other payers amounted to more than $32 million.
The reorganization plan comes after months of negotiations with the assistance of a court-appointed meditator. It will allow the Diocese to exit bankruptcy within the next few weeks.
Although the diocese is expected to have limited financial assets, it will be able to continue its essential ministries and services, according to the diocese.
“We wish to thank all of the parties, including the court appointed mediator Judge Gregg W. Zive, Judge Klein, the sexual abuse survivors, the insurers, the creditors’ committee, and their respective counsel, our counsel, and the entire Catholic community for helping bring this very difficult chapter in the history of the Diocese to an equitable resolution,” Blaire said.
Community members who wish to see the full reorganization plan or any of the documents filed in this case may visit