Archdiocese of Baltimore announces that it has filed for Chapter 11 bankruptcy reorganization

BALTIMORE (OSV News) -- The Archdiocese of Baltimore filed for Chapter 11 reorganization Sept. 29 to address "a great number of historic" child sex abuse claims it expects to face under a new Maryland law that lifts the statute of limitations on certain civil claims and takes effect Oct. 1.

"After consulting with numerous lay leaders and the clergy of the Archdiocese, I have made the decision I believe will best allow the Archdiocese both to equitably compensate victim-survivors of child sexual abuse and ensure the local Church can continue its mission and ministries," Archbishop William E. Lori announced Sept. 29 in a statement.

The archdiocese's bankruptcy filing was not unexpected, Archbishop Lori noted, referring to his Sept. 5 open letter to the faithful in which he said the decision to file for Chapter 11 was being seriously considered because the new law allows abuse claims "previously barred by Maryland law" to be brought forward.

The law, passed by the Maryland General Assembly earlier this year, removed any statute of limitations for civil suits involving child sexual abuse. It caps suits against public institutions such as government schools at $890,000 per claimant, and for private individuals or institutions such as churches at $1.5 million per claimant.

The previous law allowed such suits for people up to age 38, an increase from the previous age limit of 25. At the time, the Maryland Catholic Conference -- which includes the Archdiocese of Baltimore as well as the Archdiocese of Washington and the Diocese of Wilmington, Delaware, which both include Maryland counties -- supported the increase to age 38.

"This announcement will no doubt raise several questions and concerns that I will strive to address today and over the coming months," Archbishop Lori said Sept. 29. "Before I do so, however, I must pause to offer my heartfelt and enduring apology for the Church's past failings. We cannot and will never forget the devastation caused by some ministers of the Church."

The archbishop acknowledged that "no apology, compensation, or knowledge of our present-day accountability measures will necessarily lead to healing for victim survivors, nor repair the harm they suffered."

"To be sure, conversations with victim-survivors have taught me that neither I nor the Archdiocese can undo what was taken from them," he said. "At the same time, the Church cannot and will not abandon its moral responsibility to assist victims and accompany them on their journeys."

With "an approved plan" under Chapter 11, the Baltimore Archdiocese will be reorganized, victim-survivors "will be equitably compensated" and the church "will continue in its mission and ministries," he explained. Archbishop Lori emphasized Chapter 11 "is different from Chapter 7 bankruptcy where organizations sell all of their assets to satisfy creditors and shutter their doors."

He said archdiocesan officials expect the reorganization to involve several steps over the next two to three years.

"Generally speaking, shortly after today's filing, the bankruptcy court will begin to accept claims from victim-survivors for a specified period of time," he said, followed by the archdiocese and victim-survivors entering negotiations "with the hope of agreeing to a plan that includes a trust fund to provide compensation."

If the bankruptcy court approves such a plan, "no future claims for past cases of abuse can be brought against the Church," he said.

Archbishop Lori called the Chapter 11 reorganization filing "the best path forward to compensate equitably all victim-survivors, given the Archdiocese's limited financial resources, which would have otherwise been exhausted on litigation."

"Staggering legal fees and large settlements or jury awards for a few victim-survivors would have depleted our financial resources, leaving the vast majority of victim-survivors without compensation, while ending ministries that families across Maryland rely on for material and spiritual support," he added.

He also noted that the church's efforts "to eradicate the scourge of child sexual abuse from our parishes, schools and ministries and to provide care and compensation to those harmed did not begin with today's Chapter 11 reorganization, and our efforts most certainly will not end here."

Over more than three decades, "this journey has included many steps ... from our zero-tolerance policies, extensive training and reporting requirements and pastoral care to voluntary settlements offered to victim-survivors and today's action," Archbishop Lori said.

"We steadfastly hope and pray those who have been harmed can find some peace in the light that has been shone on the Church's sinful past," he concluded, "as well as solace through the pastoral care and financial compensation that we hope will be provided under the reorganization process."