“The diocese was in need of right-sizing,” said the attorney, Matthew Haverstick of the Kleinbard law firm. “Bankruptcy is really the responsible way to do it, so it can continue to do all the things it does, spiritually and charitably.”
Since 2004, 20 Catholic dioceses in the United States have filed for bankruptcy protection, according to the website BishopAccountability.org, which tracks the Catholic Church’s sexual abuse crisis. The most recent, in September, was the Diocese of Rochester, N.Y.
Pennsylvania sparked a wave of state investigations of Catholic dioceses nationwide when its attorney general, Josh Shapiro (D), unveiled a massive grand jury inquiry into six dioceses, including Harrisburg, in summer 2018. (Two others, the Diocese of Altoona-Johnstown and the Archdiocese of Philadelphia, had been the subject of earlier investigations.)
The inquiry, which found more than 300 priests had allegedly molested more than 1,000 children in the state over the span of many decades, inspired attorneys general across the country to seek documents from Catholic dioceses. But in Pennsylvania, statutes of limitation prevented almost all of the named priests who were still living from facing criminal or civil suits.
Shapiro and a host of activists have campaigned, so far without success, for Pennsylvania to change its statute on child sex crimes and to open a window for victims of prior abuse to sue their abusers, as neighboring New York and New Jersey and other states have done in recent years. Such a window potentially could lead to financially devastating lawsuits against Catholic dioceses, similar to the suits faced by the Boy Scouts of America, which filed for bankruptcy a day before the Harrisburg Diocese.
Those proposals have not made it through the state legislature.
But the state Superior Court recently found that victims in some circumstances can sue a diocese, even after the time in which they can legally sue the allegedly abusive priest has passed. Haverstick, who called the Superior Court’s decision “bad law,” said the Harrisburg Diocese has faced several lawsuits since that appellate decision.
“Any of those lawsuits by themselves could have been catastrophic. The combined liability could be an even bigger catastrophe,” he said. “The advent of that change in the law is something that we considered” in deciding to file for bankruptcy while these suits are making their way through the courts.
A bankruptcy proceeding would freeze those lawsuits, and compensation for victims would become part of the bankruptcy judgment.
Shaun Dougherty, an activist who has campaigned for statute-of-limitation changes in Pennsylvania and is now running for the state Senate, said he feared victims would get far less out of a bankruptcy settlement, and would not get the day in court that they sought. “If you’re a victim that finally had your opportunity to seek justice — it’s horrendous,” he said. “That’s how [Catholic dioceses] operate. They’re protecting the secrets, the assets.”
The Diocese of Harrisburg has already paid $12 million in settlements with more than 100 abuse victims, the diocese said in August, after opening a window from February through mid-May for victims to apply for compensation. The average settlement was $114,000.
The diocese covers 15 counties in central Pennsylvania, operating 40 schools and one hospital and says 230,000 Catholics live in its territory.