San Francisco’s Catholic Archdiocese filed for Chapter 11 bankruptcy amid a wave of sexual abuse lawsuits filed against the church in recent years, according to a statement from Archbishop Salvatore J. Cordileone on Monday.
The decision to file for Chapter 11 had been announced as likely to happen earlier in August. Bankruptcy allows the archdiocese to continue operating while reorganizing its finances.
During his tenure as archbishop of San Francisco, Cordileone has grappled with decadeslong sexual-abuse scandals that have gripped the church while overseeing an $87 million settlement.
“The unfortunate reality is that the archdiocese has neither the financial means nor the practical ability to litigate all of these abuse claims individually and, therefore, after much consideration, concluded that the bankruptcy process was the best solution for providing fair and equitable compensation to the innocent survivors who have been harmed,” Cordileone said in the statement.
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.
News also broke on Friday that a former student filed suit against St. Ignatius College Preparatory School, alleging that a popular drama teacher had kissed him back in 1996. A lawyer for the student told NBC Bay Area that the incident sent his client's life into a "tailspin."
In a statement sent out to alums, St. Ignatius said it had hired an independent outside investigator to look into the allegations and that the teacher no longer works there.
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 earlier this month. “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.
At that time, Sakoda said if the archdiocese filed for Chapter 11, SNAP hoped a federal judge would 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.