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Bankruptcy Judge Rules Catholic Parishes Must Share $120 Million With Abuse Victims

Posted By admin || 17-Jul-2010

Judge Rules Catholic Parishes Must Share $120 Million With Abuse VictimsIn the controversial bankruptcy case of the Delaware Roman Catholic Diocese, bankruptcy judge Christopher Sontchi ruled that a pool of $120 million administered by diocese officials should be considered part of the bankruptcy case and shared with abuse victims.  The bankruptcy judge also said that parishes were entitled to file bankruptcy claims against the diocese because they had contributed money to the investment account.

The diocese filed bankruptcy in October with plans to settle lawsuits by current and former parishioners who say they were sexually molested by priests. Since then, lawyers for the diocese and those for more than 140 abuse victims have fought in court over everything from the cash pool to which sex-abuse lawsuits should be allowed to go to trial.

And while the individual parishes are not part of the bankruptcy case, abuse victims in the case are asking the bankruptcy judge to consider whether individual churches involved in the abuse of parishioners should be forced into bankruptcy also.  Currently individual churches are not a part of the diocese's bankruptcy filing because the churches are separate entities.  But if they are forced to be in bankruptcy with the diocese, their assets, including church properties, such as schools, land or bank accounts, could be used to pay creditors, thus increasing the amount of money claimants would receive.

In the 2007 bankruptcy case of San Diego's Catholic diocese, the church agreed to pay $198 million to victims to settle 144 abuse claims.  Victims in that bankruptcy case were paid on average from $300,000 to $1.3 million each as a part of their settlement. 

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