On Monday, Sept 20, the Roman Catholic Diocese of Tuscon, Arizona filed for Chapter 11 reorganization in the U.S. Bankruptcy Court, becoming the second Catholic diocese to declare bankruptcy since the wake of the nationwide sex-abuse scandal in 2002.
Tucson Bishop Gerald Kicanas said “Bankruptcy was the best option” since it would enable the diocese and its 75 parishes to continue its work in the face of dozens of possible multi-million-dollar lawsuits.
“The decision is the best opportunity for healing and for the just and fair compensation of those who suffered sexual abuse by workers for the Church in our Diocese,” Kicanas said in a letter released Monday.
To date, the Tucson diocese has paid more than $20 million in legal claims; it faces at least 22 additional lawsuits by alleged victims. According to the Associated Press, a lawsuit that goes to trial on Sept. 29 is believed to have forced the filing.
The first Archdiocese to have filed bankruptcy in lieu of the sex-abuse scandal is the Archdiocese of Portland. The archdiocese, faced with up to $100 million in lawsuit settlement funds, filed chapter 11 this July.
Critics of such “bankruptcy claims” say the filings are a ploy used by the Catholic church to hide assets and avoid liability for decades of abuse by its priests.
Lynne Cadigan, a Tucson attorney who has helped most of the plaintiffs suing the diocese, called the bankruptcy filing "a public relations ploy" used to court sympathy and not justly settle claims.
"For 30 years they were running a criminal conspiracy of concealing sex crimes against children," Cadigan said. "Now, instead of being held accountable, they are hiding behind a corporate policy of bankruptcy."
Cadigan was the representative attorney in a case that eventually cost the Tucson diocese a reported $14 million, the largest settlement in the diocese’s history. Church officials have said it was forced to sell its headquarters to cover the costs of the case.
Other dioceses across the U.S. have also sold property to pay off the millions due in settlement funds. The Boston archdiocese alone sold $100 million in land and buildings to pay for settlements due to hundreds of abuse victims. Currently, the archdiocese is closing down a fifth of its churches to sell the land and buildings.
