Minnesota Diocese Files Chapter 11 Over Sexual-Abuse Claims

January 21, 2015

The Archdiocese of Saint Paul & Minneapolis is the 12th U.S. diocese to seek bankruptcy protection to deal with sexual-abuse claims.

The Chapter 11 filing on Jan. 16 in St. Paul follows legislation passed by Minnesota in May 2013 that allowed people to assert claims for sexual abuse that otherwise would have lapsed years ago. The state law opened the door to a number of additional claims for clergy misconduct, the Minnesota church said in court papers.

The archdiocese said it’s been sued 21 times, with three trials scheduled to begin Jan. 26. The church has insurance coverage for some but not all of the claimants in the pending cases. In some instances, coverage is in dispute.

The strain of civil litigation is expected only to increase during the remaining term of the extended statute of limitations, according to court papers.

Too large a settlement with a select group of pending cases could leave the archdiocese with insufficient assets to compensate other claimants and could result in a disproportionate allocation of limited funds, the church said.

The archdiocese said reorganization is the only way to fairly and equitably fulfill obligations to all victims.

Revenue is derived primarily from donations and parish assessments.

For the year ended June 30, gross revenue was about $25.5 million, according to court papers.

The petition listed assets of more than $10 million and liabilities of more than $50 million.

The case is In re Archdiocese of Saint Paul & Minneapolis, 15-bk-30125, U.S. Bankruptcy Court, District of Minnesota (St. Paul).

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