Lawsuits Lead SF Archdiocese to Bankruptcy

( – The Archdiocese of San Francisco has financially crumbled under the strain brought by allegations of child abuse in the jurisdiction. More than 500 civil suits proved to be too much for the church and their leadership has opted to file for Chapter 11 bankruptcy.

San Francisco’s Archbishop, Salvatore Cordileone, released a letter on August 21 informing parishioners of the church’s decision. The reverend said the conclusion to reorganize the Archdiocese’ finances came after “reflection, prayer” and legal consultation.

Cordileone’s bankruptcy announcement had been anticipated for some time. In 2019, he said the possibility of a filing was “very likely.” His words followed a move by the California legislature to draft a new law that would allow victims of clergy abuse to pursue justice well after the statute of limitations had expired. After AB 218 was signed into law by then-Governor Brown, civil suits flooded the Catholic Church.

Prior claims under a different law had already forced the church to make payouts to around 100 victims totaling almost $70 million. To make restitution, the church was forced to file insurance claims and sell excess property, but the moves were only enough to keep the church afloat temporarily.

Cordileone acknowledged “the sins” of clergy in his Archdiocese and said that their actions led to “irreversible harm” for the survivors. The Bishop said he remains “committed to” the victims and their ongoing “healing and care.”

A network of area victims released a statement following the bankruptcy announcement in which they expressed skepticism about the Church’s financial condition. The organization said they “seriously doubt” that the San Francisco Archdiocese “does not have” the funds needed to grant the court-ordered payouts to victims.

Legal protections afforded under Chapter 11 allow an organization’s day-to-day operations to continue with certain impediments while their finances are reorganized. The Chapter 7 alternative forces a complete liquidation of an organization’s assets and is often seen as the harshest possible outcome.

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