Catholic diocese in Pennsylvania files for bankruptcy protection

YORK, Pa. – The Roman Catholic Diocese of Harrisburg, facing millions of dollars in past sexual abuse claims, filed for bankruptcy protection Wednesday, according to court documents.

The move comes more than a year after the landmark grand jury report, identifying 301 priests accused of abuse in Pennsylvania and the Catholic Church's efforts to cover it up.

"This plan will allow us to continue the church's work in our diocese while equitably compensating our creditors," said Bishop Ronald Gainer at a news conference. "This difficult decision was made after countless hours of prayers, consultation and deliberation."

The diocese filed its petition for Chapter 11 reorganization in U.S. Bankruptcy Court in Pennsylvania. The petition estimates the dioceses' assets at $1 million to $10 million – and its financial liabilities as $50 million to $100 million.

At the one-year anniversary mark of the grand jury report, released on Aug. 14, 2018, the diocese said that more than 100 clergy sexual abuse victims had accepted compensation payouts totaling more $12 million.

The bankruptcy filing halts all action on the civil suits that have been filed against the diocese and shifts the claims to the bankruptcy proceeding, as well as any claims waiting in limbo with the compensation fund.

A Chapter 11 filing can allow the diocese to reorganize its finances, marshal funds to pay fair compensation to sex-abuse accusers and create a plan to continue operations much as they were before.

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"You have an organization that financially is paying out more than it's taking in," said Matt Haverstick, attorney for the diocese. "Its an attempt – and bankruptcy is used as dirty word, but it shouldn't be – it’s a good-faith effort for an organization who doesn’t want to skip out on their bills. This an attempt to put the diocese on good solid financial footing."

Attorney Richard Serbin, who practices law in Altoona, represents survivors of sexual abuse against perpetrators and the institutions that enable them. He said at least five of his clients will be affected by Wednesday's news.

"Bankruptcy changes how we can proceed with these cases," Serbin said. "And we don't want the survivors to be left out in the cold."

Filing for bankruptcy could give the diocese an opportunity to manipulate how it presents and hides discovery, he said.

"We know about how many priests have been accused, but what about seminarians or teachers?" Serbin said. "Going through bankruptcy court keeps that information from showing up in police reports or being released publicly. It's just a way to protect the abusers."

Democratic state Rep. Mark Rozzi, himself abused by a priest when he was a child in the Allentown diocese, criticized the move, calling it another defense tactic by the church.

"It's just another slap in the face for victims," Rozzi said. "Instead of doing right by the victims, they are concerned about themselves. This is all about self preservation."

The diocese has not announced any plans for church or school closures amid the bankruptcy filing.

"Each parish is a separate entity and should not be directly impacted," said diocese spokesman Mike Barley. "Ultimately, the plan for the diocese moving forward will be determined as we go through this process."

The filing is intended to preserve the ability to carry out the church's ministries within the diocese, parishes and schools.

"It's important to know that tomorrow is going to look like yesterday," Haverstick said. "No one in this process can tell you what the end of the process is going to look like – no one in this room knows."

This article originally appeared on York Daily Record: Harrisburg Catholic diocese bankruptcy filing follows abuse claims