The California Diocese of Oakland has filed for bankruptcy over hundreds of costly abuse lawsuits. After extensive deliberation and much prayer, he decided to make the move, said Bishop Michael Barber, as reported by Kathpress. The Chapter 11 process is the best way to achieve a just outcome for victims of abuse while preserving the foundational activities of the diocese.
There are two different bankruptcy procedures in the US, which are named after the respective chapters in the bankruptcy law. While the purpose of a Chapter 7 proceeding is to liquidate a bankrupt company, Chapter 11 is more of a court-supervised reorganization proceeding.
Schools must continue to operate
Bishop Barber pledged to keep Catholic schools in the Diocese of Oakland fully operational. The salaries of church employees would also continue to be paid. However, due to the high number of legal claims, it is necessary to reorganize the financial resources. Barber asked the approximately 550,000 Catholics in his diocese to adapt to painful processes of change. A number of church institutions should be closed.
The time of the crime was until 60 years ago
The background to the current spate of lawsuits is a law that has been in effect since 2019 in California, which largely abolished the statute of limitations for child sexual abuse. According to the Diocese of Oakland, the more than 330 lawsuits involve events more than 60 years old. The California dioceses of San Diego and Sacramento have already indicated they may also be forced to file for bankruptcy in the coming months.
Source: Krone
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