Got Orthonomics in your Email Box?

Wednesday, March 07, 2007

Sexual Abuse and Bankruptcy

I need to once again thank a "blog correspondent" who sent me the following story. My blog correspondent reports that the Catholic Church is collapsing under the weight of numerous lawsuits from their sexual abuse scandal as the 5th and largest Diocese filed for bankruptcy at the end of February.

You are probably wondering what exactly is "Orthonomic" about the Catholic Church? As my reader writes to me via email, "Until a major shul, yeshiva or mosdos is bankrupted, the Jewish community will keep pushing matters under the rug and hope it all goes away, be the rabbinic impropriety sexual, tax, criminal, interfering in civil divorce process, or other. To quote the former archbishop of Boston a full two years into their sex scandal, "the litigation is all for show; no one will actually bankrupt the church". Boston turned out to be the first archdiocese bankrupted."

Much blog ink has been spilled about sexual abuse and the horrors and spiritual damage that it reeks. Little that I can recall has been spilled about the impending trials and the financial damage they are sure to wreak. I do *not* wish financial problems on the frum community in the least. We have plenty of problems without inviting additional problems. But, despite the great publicity of these cases, we still have not heard much from leadership about prevention, protection, etc. I'm waiting and fear I will be waiting a long time.

Read on.
----------------------------------------------------------------------------------------------
San Diego diocese files Chapter 11
By ALLISON HOFFMAN, Associated Press Writer

The Roman Catholic Diocese of San Diego filed for bankruptcy protection late Tuesday to put off going to trial in more than 140 civil lawsuits alleging sexual abuse by priests.

The petition was lodged with the federal bankruptcy court in San Diego at 11:55 p.m., just hours before the first trial was scheduled to go forward in a San Diego courtroom. A Chapter 11 filing automatically halts court proceedings.

San Diego is the fifth U.S. diocese to file for bankruptcy protection under the shadow of sex abuse claims. With nearly 1 million parishioners, it is also the largest.

In a letter posted on the diocese's Web site earlier in the day, Bishop Robert Brom wrote that the diocese had "decided against litigating our cases because of the length of time the process could take and, more importantly, because early trial judgments in favor of some victims could so deplete diocesan and insurance resources that there would be nothing left for other victims."

Brom said in his letter that the diocese would disclose the names of accused priests who officials are certain participated in abuse, and "we will verify that no known abuser is functioning in ministry."

Diocese officials and plaintiffs' attorneys failed to reach a settlement during two days of negotiations, wrapped up Monday, in Los Angeles Superior Court.

The diocese called plaintiffs' attorneys Tuesday morning to make a "final and best" settlement offer, said Micheal Webb, attorney for the diocese. He declined to specify how much the church had offered but said it was higher than total settlements reached in other U.S. dioceses. "When they rejected it, we were left with no choice," Webb said.

The lead plaintiffs' attorney, Ray Boucher, disputed Webb's characterization of the offer and described it as an "ultimatum." He said Webb had not provided sufficient financial information to allow plaintiffs' attorneys to determine whether the offer was reasonable.

Boucher claimed the diocese was planning to file for bankruptcy protection even if the offer were accepted. "If it was really a settlement to help the diocese avoid bankruptcy that would be one thing but that's not what this was," Boucher said. "From the diocese standpoint it was a pure business decision."

Other attorneys for the plaintiffs said the total amount the church had offered was insufficient because San Diego has more plaintiffs than other jurisdictions.

"It's meaningless," said attorney Andrea Leavitt.

They also accused the church of using bankruptcy as a way to keep potentially embarrassing information under wraps. By delaying civil trials, the filing prevents diocese officials from being confronted in court with potentially embarrassing facts, missteps or documents related to past handling of abusive priests.

A trial prompted by a woman's accusations that a priest forced her to have sex in his parish office 1972, when she was 17, was scheduled to begin Wednesday. Three other trials were scheduled to follow, involving multiple victims and allegations that the diocese protected abusive priests by moving them from parish to parish.

Plaintiffs with cases already released for trial may appeal for permission to let those trials move ahead."

The diocese called plaintiffs' attorneys Tuesday morning to make a "final and best" settlement offer, said Micheal Webb, attorney for the diocese. He declined to specify how much the church had offered but said it was higher than total settlements reached in other U.S. dioceses.
"When they rejected it, we were left with no choice," Webb said.

The lead plaintiffs' attorney, Ray Boucher, disputed Webb's characterization of the offer and described it as an "ultimatum."

He said Webb had not provided sufficient financial information to allow plaintiffs' attorneys to determine whether the offer was reasonable. Boucher claimed the diocese was planning to file for bankruptcy protection even if the offer were accepted.

"If it was really a settlement to help the diocese avoid bankruptcy that would be one thing but that's not what this was," Boucher said. "From the diocese standpoint it was a pure business decision."

Other attorneys for the plaintiffs said the total amount the church had offered was insufficient because San Diego has more plaintiffs than other jurisdictions.

"It's meaningless," said attorney Andrea Leavitt.

They also accused the church of using bankruptcy as a way to keep potentially embarrassing information under wraps. By delaying civil trials, the filing prevents diocese officials from being confronted in court with potentially embarrassing facts, missteps or documents related to past handling of abusive priests.

A trial prompted by a woman's accusations that a priest forced her to have sex in his parish office 1972, when she was 17, was scheduled to begin Wednesday. Three other trials were scheduled to follow, involving multiple victims and allegations that the diocese protected abusive priests by moving them from parish to parish.

Plaintiffs with cases already released for trial may appeal for permission to let those trials move ahead.

David Clohessy, national director of the Survivors Network of those Abused by Priests, or
SNAP, told reporters outside St. Joseph's Cathedral in downtown San Diego that he and his local staff had been fielding calls throughout the day from victims, some in tears, asking about the bankruptcy.

"In all of these dioceses, the bishops claim that it's for the victims, but it's not. It's for their own self-preservation," said Clohessy.

Diocese officials announced this month in a letter distributed to parishioners that they were contemplating bankruptcy to put off going to trial. The diocese retained an Arizona bankruptcy attorney who guided the Tucson diocese through its filing, and Brom discussed the matter with diocese priests at a regular pre-Lent meeting Feb. 19 in San Diego.

The diocese, which covers San Diego and Imperial counties, has 98 churches and runs 50 schools.

In addition to Tucson and San Diego, the dioceses that have filed for bankruptcy were Portland, Ore., Spokane, Wash., and Davenport, Iowa. Tucson has emerged from bankruptcy, while proposed settlements in Spokane and Portland are awaiting final approval. Portland had been the largest diocese to file for bankruptcy, with nearly 400,000 Catholics, according to its Web site. The Iowa diocese filed for bankruptcy just days before the civil trial of a retired bishop from a neighboring diocese was set to begin. Fifteen plaintiffs had come forward alleging abuse.

Associated Press Religion Writer Rachel Zoll in New York contributed to this report

10 comments:

Warren said...

It may be easier to bankrupt a diocese than a shul or yeshiva. Only one set of books, no assets registered as belonging to family members, and since a diocese is geographical they may have rules against transferring the assets to a different jurisdiction.

Larry Lennhoff said...

the financial damage they are sure to reek
Although the situation reeks, the consequences will wreak havok.

ZachInIsrael said...

I would think that getting a useful judgement against a shul or yeshiva would be very hard. Most of them don't have much money, and probably are set up in a rather grey area of the law.

SephardiLady said...

Larry-Thanks, made correction. Once again I'm typing too fast between feeding the baby and my brain is turned off. But the play on words still works. It all wreaks and reeks!

Warren-Outside of NY it is rare to have a shul, school with property in anything but communal names. Obviously the most famous case is in NY and there could be tons of funny business going on with property and assets, but there wouldn't be so much room to move if someone went after an Out of Town Yeshiva or Shul.

One does have to wonder if when all is said and done whether the insurance companies will renew policies or if the Yeshiva involved will be able to afford to renew the policy. (At an individual level, we made some claims against our home owners insurance and now we are forever paying with higher premiums).


ZachinIsrael-I'm not sure why a diocese is a bad comparision. AFAIK a diocese has a similiar setup to a shul or yeshiva (non profit), but I would have to research that. If you know differently, let me know.

Ariella said...

I think if any victim would attempt a suit of that sort, the community would turn completely against him/her, as they would say they are in it for the money and that the damage will be suffered by people who are not at fault. I'm not saying I agree with this view, but I'm sure that's what would be said. As it is, those who dare speak out suffer a great deal for rocking the boat of the frum community. They -- rather than the perpetrators or the powers that be that kept things under the rug -- are blamed for a chilul Hashem. Seeking a financial reward would discredit them even more.

Anonymous said...

Most of you are being myopic attorneys and missing the point--it really takes little to close down a shul or organization from functioning any further; the technical aspects of legal bankruptcy are moot. The only question, as with the Archdiocese, is whether it is finally worth it to some victimes to close someone down permanently and publicly.

Personally, I think it long overdue and a welcome if painful experience for the community's long term interests. The current process of silence and stuffing crimes under the carpet has simply failed.

SephardiLady said...

Ariella-I believe that a good number of the victims have left Orthodoxy and probably don't care what the neighbors say. The Nightline expose on Mondrowitz was eye opening.

Anon-It is sad with all the huballo no standards have been made public.

Anonymous said...

Two statements cry out for correction:

1)the Catholic Church is collapsing under the weight of numerous lawsuits from their sexual abuse scandal
----- simply not true. 5 dioceses out of 196 have sought bankruptcy protection. but they've done so to prevent civil child sex abuse trials at which bishops would have to testify in open court, under oath, and disclose how much they knew about and how little they did about serial predators. So their Chapter 11 moves are NOT about scare money, but rather about plentiful secrets . . .and protecting them from scrutiny.

2) Boston turned out to be the first archdiocese bankrupted.
----- again, not true at all. they have never declared bankruptcy. in fact, stories out this week report that their fundraising is on the rebound.

Ari Kinsberg said...

ariella:


"I think if any victim would attempt a suit of that sort, the community would turn completely against him/her, as they would say they are in it for the money and that the damage will be suffered by people who are not at fault. I'm not saying I agree with this view, but I'm sure that's what would be said"

this is exactly what they say

anonymous gentile said...

"I'm not sure why a diocese is a bad comparision. AFAIK a diocese has a similiar setup to a shul or yeshiva (non profit), but I would have to research that. If you know differently, let me know."

The difference I think would be that a shul or a yeshiva is an independent organization with, as someone else noted, little or no assets. A diocese is basically a religious/administrative subdivision of the Catholic Church with defined geographical boundaries. It's assets would typically include all Church property within those boundaries, and perhaps elsewhere.That might include schools, churches, hospitals, nursing homes, office buildings, vacant property obtained for future use (such as a cemetery), seminaries, retreat houses, low income housing, warehouses used for collecting and distributing food and other things for the needy, television and radio stations with studios and broadcast facilities and the valuable licenses that go along with them. Then there are whatever funds that are invested as cash reserves.In a large diocese we could conceivably be talking billions of dollars in total assets. The diocese of Rockville Center which covers Nassau and Suffolk counties on LI has cash reserves alone in well excess of $150 million dollars.

Every single penny of this money and the property purchased with it has come from the donations of the faithful (and the not so faithful), and the income from investing some of those funds.

The various Church officials in the past had an obligation to expose or at least expel the priests who were molesting these kids and didn't, which is why they are in this situation to begin with. Current Church officials have a similar obligation to protect the assets of the diocese, which are there to do the good works of the Church, in any legal way possible. This will of course include the protection of bankruptcy proceedings.