SAN DIEGO — Cardinal Robert W. McElroy has announced that the San Diego Diocese may consider filing for bankruptcy to ensure that its assets are used to equitably compensate survivors of clergy sex abuse for the terrible wrongs done to them.
He made the announcement in a letter sent to pastors on Feb. 9. He met with them that same evening, along with members of parish finance councils.
The cardinal noted that, in 2019, the Legislature passed and the governor signed AB 218, a bill that revived all claims involving the sexual abuse of minors and created a three-year window for filing a lawsuit, Jan. 1, 2020, to Dec. 31, 2022. This was the third time the Legislature had voted to reopen the statute of limitations. A fourth bill has been introduced this year.
The law applied equally to individuals and institutions and to public and private organizations. This includes schools and universities, youth organizations, state and local governments and to all religious organizations, including the Catholic Church.
During that three-year window, about 400 lawsuits were filed against the diocese. The oldest claim involves an accusation from 1945. Two-thirds of the claims involve allegations that took place roughly 50 to 75 years ago, between 1945 and 1975. None of the accused priests are currently in ministry; only three are still alive.
No claims involving diocesan priests are alleged to have taken place in this century.
“This reflects the reality that the Church has taken enormous steps to root out the sexual abuse of minors in its life and to promote the protection of minors,” Cardinal McElroy said in the letter.
“Still, the diocese must face the staggering legal costs of responding to these new lawsuits,” the letter said.
In 2007, the diocese entered into a Master Settlement Agreement with 144 survivors — all that were before the court at the time — for $198 million, an average of nearly $1.4 million per person. If the 400 or more claims in 2023 were settled for a similar amount of money, the cost would exceed $500 million.”
The diocese simply does not have the assets to go to trial or settle the new claims, making bankruptcy a likely option to pursue, the cardinal said.
The cardinal said that a filing for Chapter 11 reorganization bankruptcy would be made solely by the diocese and would not include the parishes and Catholic schools, whose assets are held in their own individual corporations.
To protect themselves from future lawsuits, however, parishes may want to contribute to the cost of a diocesan settlement. If the diocese chooses bankruptcy as an option, parishes (and parish schools) will have their own attorneys to represent their interests, separate from any attorneys hired by the diocese.
Donations to the Annual Catholic Appeal (ACA) are for specified purposes, specifically Catholic schools, faith formation, Catholic Charities and clergy formation and support. All ACA contributions are maintained in a separate ACA-designated bank account to only be used for their designated purposes.
The Catholic Community Foundation of San Diego and Catholic Charities are separate corporations and will not be affected by a diocesan bankruptcy.
A decision on a potential diocesan bankruptcy won’t be made until summer.