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St. Paul-Minneapolis Archdiocese files for bankruptcy

Created: 01/16/2015 6:21 PM
By: By AMY FORLITI

ST. PAUL, Minn. (AP) — The Roman Catholic Archdiocese of St. Paul and Minneapolis filed for bankruptcy protection Friday, saying it is the best way to fairly compensate victims of clergy sexual abuse while allowing the archdiocese to continue the church's mission.

Archbishop John Nienstedt said Chapter 11 reorganization "will allow the finite resources of the archdiocese to be distributed equitably and fairly among victims and survivors ... This is not an attempt to silence victims, nor is it an attempt to deny them their justice in court. On the contrary, we want to respond positively in compensating them for their suffering."

The archdiocese is the 12th U.S. diocese to seek bankruptcy protection in the face of sex abuse claims. Church leaders have said for months that bankruptcy was an option, as the archdiocese faces numerous lawsuits by abuse victims. The lawsuits will be put on hold while bankruptcy is pending.

The filing estimates the archdiocese — the state's largest with more than 800,000 parishioners — has assets between $10 million and $50 million, with liabilities between $50 million and $100 million. It also estimated 200 to 300 creditors.

Nienstedt said the archdiocese has a long journey ahead in working to restore trust, but he does not plan to resign, as some have called for him to do. He said the archdiocese may have to sell assets in the bankruptcy process.

Jeff Anderson, a victims' attorney who is collaborating with the archdiocese on child protection issues as part of an October settlement, said the bankruptcy filing is "necessary." He believes the archdiocese will continue to put victims first, and said the bankruptcy won't stop the ongoing disclosure of information about the abuse cases.

But Patrick Noaker, another victims' attorney, said he's disappointed. Noaker is handling a lawsuit scheduled for trial this month, and he said the filing robs him of the chance to reveal information that could help protect children in the future.

"The process of bankruptcy is not going to make kids safer," he said. "I don't think it's any accident that they filed a week before this trial was going to start."

Minnesota lawmakers created a three-year window in 2013 for victims of past sexual abuse to file claims that otherwise would have been barred by the statute of limitations. Since then, the archdiocese has been sued roughly two dozen times, and it has received more than 100 notices of potential claims.

The mission of the church and its day-to-day operations will continue through bankruptcy, said Charlie Rogers, an attorney working for the archdiocese. Parishes and schools, which are incorporated separately from the archdiocese's central office, should not be affected.

Pamela Foohey, an associate professor at Indiana University's Maurer School of Law, said filing for bankruptcy is a smart move for dioceses in this situation and it can help victims, if they are treated fairly.

The St. Paul-Minneapolis archdiocese will try to avoid prolonged fights seen in other dioceses, Rogers said. The archdiocese has already addressed issues that have bogged down other bankruptcies, including implementing a new system to protect children and disclosing thousands of pages of church documents and the names of accused priests.

The Rev. Charles Lachowitzer, a top church official, said the archdiocese is doing the right thing, and he hopes parishioners see the bankruptcy filing as a necessary step to close "a horrendous and tragic chapter in the life of the church."

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Follow Amy Forliti on Twitter: http://www.twitter.com/amyforliti

(Copyright 2015 by The Associated Press. All Rights Reserved.)

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