San Francisco’s Catholic Archdiocese will “likely” be filing for Chapter 11 bankruptcy amid hundreds of lawsuits filed against the church in recent years, according to a statement by the church’s archbishop.
The decision to file for Chapter 11, according to Archbishop Salvatore J. Cordileone, would allow the archdiocese to continue to operate while reorganizing its finances and handling the cases all together rather than individually.
“For several months now, with the assistance of our financial and legal advisors, we have been investigating the best options for managing and resolving these cases,” Cordileone said. “After much contemplation and prayer, I wish to inform you that a Chapter 11 bankruptcy reorganization is very likely.”
During his tenure as archbishop of San Francisco, Cordileone has grappled with decadeslong sexual-abuse scandals that have seized the church, while overseeing an $87 million settlement.
The filing comes almost three months after the Catholic Diocese of Oakland announced it had also filed a Chapter 11 bankruptcy in light of 330 lawsuits.
Cordileone pointed to 500 civil cases that were filed against the Archdiocese after California removed the statue of limitations on sexual abuse claims for nonprofits in 2019.
“... The vast majority of the alleged abuse occurred in the 1960s, 1970s and 1980s and involved priests who are deceased or no longer in ministry,” he said. “In addition to deceased individuals who can no longer defend themselves, a significant number of these claims include unnamed individuals or named individuals who are unknown to the Archdiocese.”
The bankruptcy will not affect the Archdiocese’s parishes and schools, according to Cordileone, which will continue to operate normally.
Melanie Sakoda, a spokesperson for the nonprofit Survivors Network of those Abused by Priests (SNAP), called into question the bankruptcy filing as an attempt to shortchange victims of abuse.
“We seriously doubt that the Archdiocese of San Francisco does not have the assets to settle these lawsuits,” she told The Standard in an email. “The Archdiocese may indeed be morally bankrupt, as evidenced by their refusal to publish information about abusers that are known to them, but we doubt that they are really financially bankrupt.”
According to the U.S. Courts, a Chapter 11 bankruptcy filing is when the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business and may, with court approval, borrow new money. The debtor also usually proposes a plan of reorganization to keep its business alive and pay creditors over time.
Sakoda said that, if the Archdiocese files for Chapter 11, SNAP hopes a federal judge will review assets and property.
“If they do file, we hope that the federal judge closely examines their real estate holdings, which are spread across three of the richest counties in the United States, as well as any recent transfers of those assets to other entities,” she said.
The Archdiocese, according to the church’s website, is “unclear” about how long the bankruptcy process would take.