The Roman Catholic Diocese of San Diego said Thursday it will file for Chapter 11 bankruptcy on Monday to provide compensation for survivors of sexual abuse and continue its mission of education, pastoral service, and outreach, KGTV in San Diego reported.
Cardinal Robert McElroy confirmed the filing in a statement to parishioners and clergy: “Only the Diocese will be filing for bankruptcy. The parishes, parochial schools, and high schools will not. But it is clear that as part of providing appropriate compensation to past victims of the sexual abuse of minors, both the parishes and high schools will have to contribute substantially to the ultimate settlement in order to bring finality to the liability they face.”
The diocese has had claims from 438 individuals alleging sexual abuse by clergy over several decades. The diocese indicated it contemplated bankruptcy protection in February, The San Diego Union-Tribune reported Thursday.
Bankruptcy protection will pause all lawsuits against the diocese until a universal settlement of the claims is reached through the bankruptcy process. This marks the second time the diocese has filed for bankruptcy. The first was in 2007, when it settled 148 claims for $198 million.
The diocese, encompassing 96 parishes and serving approximately 1.3 million Roman Catholics in San Diego and Imperial counties, is seeking protection through AB 218, a state law enacted in October 2019 that reopened a three-year window for filing claims for historical sexual abuse.
The window closed at the end of 2022. The law also allows for tripled monetary damages if it is proved that the organization engaged in a cover-up.
In addition to the bankruptcy proceedings, the diocese faced legal challenges on two other fronts. A lawsuit filed in March 2023 alleged the diocese fraudulently transferred nearly 300 properties to individual parish corporations in 2019 to divest assets and reduce potential settlement payouts. The diocese denied any fraud, claiming the transfers were long-planned and coincidental to the timing of the new law.
The diocese is also involved in a lawsuit with its insurer, Catholic Mutual Relief Society of America, which claims it should not be liable for settlements because of policy caps and knowledge of clergy proclivities toward sexual abuse, which would exclude coverage under past policies.
The Diocese of San Diego joins the dioceses of Santa Rosa and Oakland in filing for bankruptcy in California amid numerous claims of sexual abuse.
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