Roman Catholic Diocese Of Oakland Declares Bankruptcy

The Roman Catholic Diocese of Oakland announced Tuesday they will be filing for Chapter 11 bankruptcy due to more than 330 child sex abuse lawsuits, attempting to stabilize finances to both compensate victims and continue the work of the Church.

While past abuse cases, including the majority of the over 330 currently being challenged in the Oakland Diocese, would have been waived due to the statute of limitations, a new Californian law upended that and revived more cases than the Church previously estimated.

AB 218, which was signed into law in 2019, specifically increased the time limit on childhood sexual assault cases to “22 years from the date the plaintiff attains the age of majority or within 5 years of the date the plaintiff discovers or reasonably should have discovered that the psychological injury or illness occurring after the age of majority was caused by sexual assault, whichever is later.” While the law ended at the end of 2022, many claims are still being processed, hence the quickly rising number of lawsuits.

As a result, many cases dating back to the 1960s have been brought forward, even in cases where the priest being accused is either no longer serving the church or had died. While AB 218 was passed several years ago, an early reluctance by survivors to file lawsuits, the COVID-19 pandemic disrupting courts, and legal red tape had somewhat delayed many of the cases from reaching courtrooms until this year. But now, with the accumulated lawsuits beginning to come all at once, many Dioceses in California are now beginning to feel the pressure.

“You have to understand that these are not easy things to talk about and many people don’t want their name out there as being a victim,” said lawyer Mark Welsh, who has been a part of several Catholic Church lawsuits in 6 states. “Even with California passing that law on the statute of limitations, many don’t want to come forward. The trauma, the stigma, and some just wanting an apology and tougher laws instead of money… You would be surprised at how many victims don’t want money.”

“But, as we’ve seen in California, it has also brought many more forward, with many feeling like that they ‘missed their chance’ at fighting back against the church. So the church always knew many would come forward, but they didn’t plan on this many because of the end date on limitations. That’s a big part of the reason why so many are now not doing so good.”

In March, the Diocese of Santa Rosa, which covers the counties of Sonoma, Napa, Mendocino, Lake, Humboldt, and Del Norte and serves around 178,000 Catholics, became the first Californian Diocese to declare bankruptcy with more than 200 sexual abuse lawsuits filed. The sudden rise in cases, especially for what is considered a smaller diocese, alarmed many in California, with many expecting others to declare bankruptcy in the near future. On Tuesday, the Diocese of Oakland, which covers Alameda and Contra Costa counties and serves 550,000 Catholics, became the second Diocese to declare bankruptcy.”

Diocese of Oakland declares bankruptcy

In a letter, Oakland Bishop Michael Barber noted that the bankruptcy came as a direct result of the AB 218 law.

“We made the filing because we believe this process is the best way to support a compassionate and equitable outcome for survivors of abuse, while ensuring we continue to provide the essential services and support so crucial to our parishioners and communities,” said Bishop Barber. “Our mission will continue as it always has. Our schools will not be impacted, nor, for example, will Catholic Charities, St Vincent de Paul Society, or Catholic Cemeteries. Employees will be paid as usual, and their benefit programs will continue uninterrupted.”

“While the filing will have a direct impact on our Mission Alignment Process, it will not divert us from our mission. With God’s grace and our unified commitment, I am confident we will be able to continue our work to re-align our resources to meet the needs of our diocese, while addressing claims coming through the bankruptcy process.”

“Even though the statute of limitations window closed December 31, 2022, claims received prior to that date are still being processed and we are still receiving notification of those claims. As of today, we have more than 330 claims. A great majority of the alleged abuse occurred between 1960 and 1989. Since then, the diocese has put in place robust safeguards to protect children and vulnerable adults including background checks and training about the nature of child sexual abuse, how it is perpetrated, how to report it, and strategies for prevention.”

In a response to the bankruptcy announcement, SNAP, the survivors network of clergy abuse victims said, “Everything about this bankruptcy strikes us as wrong. It is all about keeping money and secrets. From one coast to the other, the same ruse is being used by Catholic bishops. Minimize and cover-up child sex crimes, while keeping abusers in ministry.”

“The Diocese of Oakland is morally bankrupt, but they do not deserve to be declared financially bankrupt.”

The bankruptcy will also likely have political ramifications according to experts.

“Besides AB 218 and what it did, politically, there are still some issues here,” added Welsh. “Oakland and the County politicians in the boundaries of the Diocese don’t want to anger hundreds of thousands of voters by blasting the Church over this, but they also know that you cannot side  with the abusers. So you’ll be seeing them walk a thin line on this one especially as the election next year grows nearer. Notice no politicians have really commented on this from inside the area? They know that commenting can be playing with fire. What we’ll see is many saying that they feel for the victims but also point out how the bankruptcy can be bad for the region especially when things like charities are involved. There’s a playbook in reacting to something like this, and right now they’re all playing it.”

Other Catholic Dioceses may declare bankruptcy soon as more abuse lawsuits are filed.