Wilmington Catholic diocese: 'Bankrupt' by abusive priest cases

"The Catholic Diocese of Wilmington Inc. has filed for Chapter 11 reorganization under the U.S. Bankruptcy Code," writes its bishop, Francis Malooly, here

"Chapter 11 offers the best opportunity, given finite resources, to provide the fairest possible treatment of all victims of sexual abuse by priests of our Diocese.

"Some months ago, we petitioned the Superior Court to order an Alternative Dispute Resolution process so that a global, equitable settlement for all 142 claimants would be negotiated with the assistance of a court-appointed mediator. On October 6 the court ordered such an ADR process for all cases without long-standing trial dates.

"Thirty of the 131 cases filed against the Diocese have been scheduled for trial, with a set of eight cases to begin trial on Monday, October 19. As has been our policy, we were engaged in negotiations, with the assistance of a mediator, to settle these eight cases. These negotiations continued until today, but we were unable to achieve a settlement

"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.

"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...

"It is only the Catholic Diocese of Wilmington Inc. that is seeking reorganization under Chapter 11, not parishes, schools or related church entities which have their own corporate identities. Parishes in the Diocese of Wilmington are set up civilly and by state statute as separate corporations."

The diocese cited assets of $100 milllion, and liabilities and claims of up to $500 million, reports the Wilmington News Journal's Marueen Milford here, adding that lawyer Thomas Neuberger, who reprents clients who say they were abused by priests, will make a statement at 1 pm today.