The Cathedral of the Blessed Sacrament, the seat of the Diocese of Sacramento, is seen in 2011. Bishop Jaime Soto has announced his intention to seek Chapter 11 bankruptcy protection on behalf of the diocese, in response to hundreds of lawsuits claiming clergy sexual abuse. Photo courtesy of Cathedral of the Blessed Sacrament - Sacramento, California, by TravelingOtter used under CC BY-SA 2.0

SACRAMENTO, CA (MPG) - The Roman Catholic Diocese of Sacramento will seek Chapter 11 bankruptcy protection next year, Bishop Jaime Soto announced on Dec. 9, as it faces hundreds of lawsuits alleging child sexual abuse by clergy. The diocese oversees Catholic parishes in much of Northern California, including Sacramento County.

In a letter published online and distributed to parishioners at local churches, Soto said he expects to file for bankruptcy protection in March 2024.

“It is now clear to me that the only respectful, transparent, and fair way to address the substantial number of claims by those who have been abused by clergy and other members of the Church is to seek a court-supervised reorganization. This process will also allow me to sustain the sanctifying, teaching, and charitable work of the Catholic community in Northern California,” the letter read.

Chapter 11 bankruptcy protection generally allows an organization to continue operating while negotiating with creditors to restructure its debts. The letter noted as much and said parishes and schools in the diocese “would continue their operations uninterrupted.”

Soto said more than 250 lawsuits alleging abuse have been filed against the diocese. Without reorganization, “it is likely that not all the abuse victim-survivors would receive a fair consideration of their claim,” he said, with available funds being “depleted” in the first cases brought forward.

“Bankruptcy is a costly and lengthy process, but it also provides supervision and transparency for all the parties involved so that a fair resolution is offered to the victim-survivors of abuse,” Soto continued. He expressed hope that the diocese would “emerge from this necessary, penitential exercise with greater resolve to be a humble sanctuary of holiness and healing for all the sons and daughters of God in Northern California.”

Law Group Decries Plan

A law firm that represents people alleging clerical abuse, including cases in the Sacramento diocese, criticized the decision.

“On behalf of the many survivors who were gravely hurt, we react with deep disappointment in the choice made by the Bishop of Sacramento to seek bankruptcy protection from accountability,” Jeff Anderson and Associates said in a press release. “We know from all the work we have done with survivors across the country that bishops and dioceses have continuously utilized Chapter 11 to shamefully protect themselves.”

The release said other dioceses have used bankruptcy filings to delay court cases and prevent “full disclosure.”

“The Diocese might change, but their motivations for filing bankruptcy remain the same – the desire to protect their reputation and their assets, no matter the moral expense,” attorney Jeff Anderson said in a statement.

The Sacramento diocese is the fourth in California to seek bankruptcy protection after a wave of sexual-abuse claims under state Assembly Bill 218. The legislation took effect in 2020 and extended the statute of limitations on childhood sexual abuse, allowing much more time for accusers to come forward after reaching adulthood.

The other dioceses filing for Chapter 11 protection are Santa Rosa, San Francisco and Oakland.