Delaware Diocese Files for Chapter 11

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Delaware’s Catholic Diocese of Wilmington filed for federal bankruptcy protection Sunday night, on the eve of a civil trial in a high-profile sex abuse case against the diocese and a former priest.

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Not being a lawyer, I never know what to make of these things. Is the Church still hiding and covering up or is this the best way to facilitate caring for those harmed by this monster priest? Anybody care to explain?
 
djeter said:
Not being a lawyer, I never know what to make of these things. Is the Church still hiding and covering up or is this the best way to facilitate caring for those harmed by this monster priest? Anybody care to explain?
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It’s the latter. By filing bankruptcy, the diocese can make sure that the total pot of money doesn’t get exhausted by the first handful of victims whose cases come to trial, leaving nothing for the remaining 100+ alleged victims. The bankruptcy court will oversee a process (in which the victims will have a say) that will estimate the total number of present and future damages and try to provide equal payouts for all victims.
 
djeter said:
Not being a lawyer, I never know what to make of these things. Is the Church still hiding and covering up or is this the best way to facilitate caring for those harmed by this monster priest? Anybody care to explain?
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From the press release on the Diocese’s website:
Our concern throughout the negotiations was that too large a settlement with these eight victims would leave us with inadequate resources to fairly compensate the other 133 claimants, and continue our ministry. It is our obligation to ensure that all victims of abuse by our priests are fairly compensated, not just those fortunate enough to secure earlier trial dates.
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The Chapter 11 filing is in no way intended to dodge responsibility for past criminal misconduct by clergy – or for mistakes made by Diocesan authorities. Nor does the bankruptcy process enable the Diocese to avoid or minimize its responsibility to victims of abuse. Instead, the Chapter 11 filing will enable the Diocese to meet its obligations head-on and fulfill its responsibility to all victims.
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The Diocese of Wilmington is committed to pursuing the truth because truth heals. Three years ago Bishop Saltarelli, whom we buried here last week, released the names of 18 Diocesan priests who had admitted, corroborated or otherwise substantiated allegations of abuse of minors. It was one of the most detailed voluntary disclosures of its kind in the United States. In all of those cases, the Diocese shared information about abuse allegations with law-enforcement authorities. All eight of the priests who were living at the time of Bishop Saltarelli’s announcement previously had been removed from any ministerial duties, and for all eight priests, the Diocese has initiated or completed the process of laicization, or removal from the priesthood – the harshest punishment that the Church can impose on a priest, short of excommunication.
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Moreover, the Diocese has never sought to seal depositions of priests accused of sexual abuse, and it consistently has supported the unsealing of such records. The Diocese also has never sought to seal the priest files it has produced in discovery in the lawsuits. The Diocese itself has publicly corroborated many of the incidents of abuse, and has provided more details about what actions were taken – or, sometimes tragically, not taken – by our officials. All such information is in the court records of the cases scheduled for trial on October 19, and we believe that no significant new facts would have emerged at trial.
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My decision to file for Chapter 11 reorganization also was agonizing because it meant that, apart from the psychological and spiritual toll on the abuse victims, there will be significant financial losses for creditors who have faithfully supported us for years. The possibility of such losses has been present from the time that the scope of the claims against us first became clear, but the filing unfortunately makes it a certainty.
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Bankruptcy courts still hear cases; they don’t sweep it under the rug. These plaintiffs will still get their chance to argue their cases in court, but they’ll be put together in the same “class” as all the other people who are owed money by the diocese – like, for instance, the other claimants whose cases haven’t come to trial yet.

To give an example: let’s say you’re being sued by 200 people in cases that have a national average of a million bucks a claim (for this purpose let’s leave out the “ordinary” lawsuits for slip-and-falls, contract disputes, etc.). That’s a potential debt of $200,000,000. Now let’s say that you only own $100,000,000 in assets.

If the first 100 people win their cases and get paid off, you’ll still have another 100 people with claims against you, and they’ll get nothing. That’s isn’t acceptable, so instead the bankruptcy court will gather all the claims together and try to work something out – probably something along the lines of “You each get 48 cents on the dollar.” That way everyone gets something, it’s proportionate to each person’s claims, and the debtor gets a clean slate to start over.

There are exceptions, however. One exception is that there are different classes of debtors. If you owe me a million bucks because I lent you that money to buy land, then I’m a secured creditor, and I’ll get back everything I’m owed (either in cash or, if that isn’t possible, I’ll get the land). If the land is worth less than the debt you owe me, I’ll get the land for what it’s worth, then I’ll become an unsecured creditor as to the remainder of the debt. The secured creditors are paid first. So the reality is that the unsecured creditors are basically the last ones paid. So the people with pending lawsuits will be last in line.

Another exception is that ongoing enterprises (like, let’s just say, a business or a diocese) might be allowed to have work-out plans. So maybe the unsecured creditors, instead of getting fifty cents on the dollar right now – and leaving the debtor with absolutely nothing – will get seventy-five cents on the dollar, but paid out over the next five years, and the debtor gets to keep operating.

The diocese’s press release states that it hasn’t requested any gag orders. If that’s true, then there isn’t anything being hidden by the bankruptcy case (unless the plaintiffs’ lawyers have something they were going to spring on everyone during the trial without having already produced it in discovery as required). So the chief benefit of the bankruptcy filing is that all of the plaintiffs will be treated equally – either they’ll all get paid in full, or they’ll all get some proportionate share of their claims. But it won’t be a case of whoever-filed-the-lawsuit-first-gets-everything.
 
That’s an excellent explanation. I wish more people understood this. Dioceses that have had to file bankruptcy aren’t doing it to hide from their obligations but to ensure a fairer recovery for all victims.
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I wonder is this is what Our Lady was referring to when she stated to the three seers of Portugal Fatima in the year 1917 “That the church would be persecuted greatly if her requests are not heeded”?
 
Catholic_Press said:
Delaware’s Catholic Diocese of Wilmington filed for federal bankruptcy protection Sunday night, on the eve of a civil trial in a high-profile sex abuse case against the diocese and a former priest.

More…
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Good Luck with that. The Diocese of San Diego TRIED to file and it was DENIED by the Bankruptcy Court.
 
Catholic1954 said:
Good Luck with that. The Diocese of San Diego TRIED to file and it was DENIED by the Bankruptcy Court.
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That’s not entirely accurate. The Diocese of San Diego had no trouble filing bankruptcy. What I think you have in mind is that in August 2007, about 7 months after the bankruptcy filing, the bankruptcy court allowed more than 40 abuse cases to proceed to trial (IOW, the court lifted the automatic stay as to those cases). The Diocese ultimately reached a settlement with 144 victims in September 2007.

I think Wilmington is the seventh U.S. diocese to file bankruptcy as a result of abuse claims. The first was Portland, on July 6, 2004. Portland emerged from bankruptcy in September 2007. The second was Tucson, in September 2004. I think Tucson has also emerged from bankruptcy. The third was Spokane, in December 2004. Spokane reached a global settlement with victims in April 2007. The fourth was Davenport, Iowa, in October 2006. It reached a global settlement and emerged from bankruptcy in December 2007. The fifth was San Diego, in February 2007. The sixth was Fairbanks, Alaska, in February 2008. That one is still pending.

All the dioceses that have emerged from bankruptcy surrendered tens of millions of dollars in assets and, in some cases, incurred tens of millions of dollars in debt in order to make settlement payments to victims.

(That information came mainly from an article titled “Some Reflections on Labor and Employment Ramifications of Diocesan Bankruptcy Filings,” published in volume 47 (2008) of the Journal of Catholic Legal Studies.)
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Catholic1954 said:
Good Luck with that. The Diocese of San Diego TRIED to file and it was DENIED by the Bankruptcy Court.
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Langdell said:
That’s not entirely accurate. The Diocese of San Diego had no trouble filing bankruptcy. What I think you have in mind is that in August 2007, about 7 months after the bankruptcy filing, the bankruptcy court allowed more than 40 abuse cases to proceed to trial (IOW, the court lifted the automatic stay as to those cases). The Diocese ultimately reached a settlement with 144 victims in September 2007.

I think Wilmington is the seventh U.S. diocese to file bankruptcy as a result of abuse claims. The first was Portland, on July 6, 2004. Portland emerged from bankruptcy in September 2007. The second was Tucson, in September 2004. I think Tucson has also emerged from bankruptcy. The third was Spokane, in December 2004. Spokane reached a global settlement with victims in April 2007. The fourth was Davenport, Iowa, in October 2006. It reached a global settlement and emerged from bankruptcy in December 2007. The fifth was San Diego, in February 2007. The sixth was Fairbanks, Alaska, in February 2008. That one is still pending.

All the dioceses that have emerged from bankruptcy surrendered tens of millions of dollars in assets and, in some cases, incurred tens of millions of dollars in debt in order to make settlement payments to victims.

(That information came mainly from an article titled “Some Reflections on Labor and Employment Ramifications of Diocesan Bankruptcy Filings,” published in volume 47 (2008) of the Journal of Catholic Legal Studies.)
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My thoughts exactly. The diocese successfully filed a bankruptcy petition; about one-third of the 120 or so claims were remanded to state court for trial, but the bankruptcy court retained the case overall.
 
For those who may be interested, the Diocese of Wilmington’s website has a link where you can click through to copies of the filings in its bankruptcy case. The Declaration of Msgr. Cini (docket number 9) is very informative. (But be aware that it’s a 50+ page pdf.)

cdow.org/
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Thank you so much for that explanation. I’m going to make a post on my site explaining all of that and plan to use it.

dj
 
I’m glad you’re spreading the truth, djeter. I’ve been reading some of the on-line comments at other sites about the Wilmington Diocese’s bankruptcy, and I’m sickened by how ignorant and anti-Catholic the vast majority of comments are.
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**Hello Just want to say that I brought this up in a prayer request a few months ago.Wilmington is my diocese and I went to school with one of the accusers.Thanks for the explanations of the bankruptcy.My parish is one that is being sued by the plaintiff.I wont go into the case but its sad considering that this is all happening because of one leech
sent to our parish by the church and then sent to other parishes in the diocese.All of these parishes will (or won,t)feel the sting of this mans venom.I cannot imagine the feelings of the parishioners who just last year celebrated the 108th anniversary of the parish.Remember one man (that we know of) caused this anguish.My mother the other day asked me if we would have to look for another church to go to! My mother is 84 years old.

So remember when someone mentions Fatima or quotes a verse from the Bible that these people are innocent people and are paying for the sins of the church they built.
MY GOD PROTECT US ALL .
Ger **
 
It is just so sad to see this kind of stuff being posted in the newspapers. It is embarrassing. 😊

I have a train buddy who was raised Catholic and refuses to attend Mass because of the Priests who molested the children(boys).

There was a hugh article in the Wilmington News Journal not too long ago about these parents and their son. The priest molested their son and the parents believe that is the reason why their son is on drugs today.

It just makes me wonder when people look at a priest today…Do they think of a Holy Man or are they thinking I wonder if he is a pedophile?

Well I am not going to leave the church because of those sinful men/spirits. That is what the devil want us to do. He (Satan) is trying to take as many souls as he can all in one swoop! Our Lady Prophesied at Our Lady of Fatima that the “Devil is in his Final Battle” he is out to capture as many souls possible.
 
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