Oakland diocese mulls bankruptcy over 330 sex abuse lawsuits
The Diocese of Oakland said Thursday that it is considering filing for bankruptcy because of hundreds of lawsuits that have been filed alleging clergy members sexually abused children.
In a letter posted on the diocese website, Bishop Michael Barber said that 330 lawsuits have been filed against the diocese and he believes bankruptcy “can provide a way to support all survivors in their journey toward healing in an equitable and comprehensive way.” It would also allow the diocese to reorganize its finances, according to Barber.
His comments came three days after the Santa Rosa diocese filed for bankruptcy, saying it does not have the money to settle more than 150 child sexual abuse lawsuits filed against it over the past three years.
In 2019, state law under AB218 created a three-year “lookback” window that permitted victims of childhood sexual abuse to file civil lawsuits in cases that exceeded the statute of limitations. The deadline to file a case was Dec. 31, 2022.
“Since the closing of the filing window on Dec. 31, 2022, we have been informed there may be approximately 330 lawsuits filed against our diocese,” Barber said. The diocese said that it likely does not have the money to address the lawsuits the costs associated with them.
The Diocese of Oakland serves about half a million Catholics in Alameda and Contra Costa counties. According to its website, there are 345 priests, 110 deacons and 455 religious brothers and sisters serving in the diocese.
The Diocese of Oakland as well as its parishes and schools would continue to operate normally if it were to file for bankruptcy, although certain things “may” require approval in court, the diocese said in a frequently asked-questions section of its website. It is likely the diocese would use money reserves to continue operating and address the needs of survivors.
“We have limited cash reserves, and insurance may cover some of the claims,” the diocese said on its website. “We are also exploring the potential sale of assets that are underutilized or may not be critical in carrying out the mission of the Diocese.”
If the diocese decides to go through with the filing, it could work with a committee appointed by a U.S. trustee to identify assets that can be used to pay claims and recommend how those assets are divided among claimants.
“The proposal would be contained in a Plan of Reorganization, on which all sexual abuse claimants will be able to vote to approve or reject. If the bankruptcy court approves the plan, payments would be made pursuant to the plan and the Diocese would exit bankruptcy,” the diocese said.
In the Santa Rosa diocese case, Bishop Robert Vasa said, “Now, facing at least 160 new cases, with excess property depleted, with insurance for many of the years either nonexistent or exhausted, it is impossible to see any way forward without recourse to the bankruptcy protections our country makes available.”