Diocese of Oakland considers declaring bankruptcy

The Diocese of Oakland is considering the option of filing for bankruptcy. (Photo by Melinda Gimpel from Unsplash)

On Thursday, March 16, Bishop Michael C. Barber stated that the church officials were considering filing for Chapter 11 bankruptcy.

It was following the news that the diocese may have to face around 330 fresh lawsuits related to sexual abuse. 

According to Mercury News, these claims have surfaced after a California law, AB 218, allowed victims of sexual abuse to file complaints for a new three-year duration, which had previously expired due to the statute of limitations. 

The magnitude of the church's legal vulnerability has only become apparent recently after the end of the special filing period on December 31.

Moreover, there is a possibility that the number of lawsuits may increase further.

And so, in a letter addressed to the diocese, Bishop Barber stated that after careful consideration and seeking guidance, he believes that filing for bankruptcy is the direction that they’re going to take.

Bishop Barber explained that doing so can be a means to assist all survivors in their recovery process in a just and comprehensive manner. 

He also mentioned that it would enable the diocese to restructure its finances and continue fulfilling its divine duty assigned by the Church and Christ. 

Criticism 

The announcement made by the Diocese of Oakland has been immediately criticized by a representative of the Survivors Network of those Abused by Priests in the Bay Area. 

Joey Piscitelli, the network's Northern California leader, and a Contra Costa resident, denounced the plan.

He referred to it as a tactic to deter, delay, or diminish compensation to victims who had suffered from years of abuse. 

Piscitelli alleged that other dioceses had attempted this method in the past and accused the church of using it to avoid taking genuine responsibility for the harm caused. 

He emphasized that if the church were truly remorseful, it would act with more transparency, sincerity, and compassion towards the victims who have experienced a life of agony after being subjected to sexual assault.

Diocese Bankruptcies

The Diocese of Oakland has followed the lead of the Diocese of Santa Rosa, which made a similar announcement in early December. It was not unprecedented in California.

Over the past 10 to 15 years, dioceses in San Diego and Stockton have also sought bankruptcy protection after agreeing to multi-million dollar settlements for instances of priest misconduct. 

In total, the Catholic Church in the United States has paid out more than $2 billion in settlements to resolve sexual assault claims nationwide.

The enactment of AB 218 by Governor Gavin Newsom in 2019 has resulted in Catholic dioceses throughout California confronting a challenging situation. 

The law was introduced to simplify the procedure for lodging lawsuits related to sexual misconduct. 

A lawsuit against the Diocese of Oakland was expected to commence trial as early as May.

 

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