Archdiocese of Milwaukee Declares Bankrupty

The Archdiocese of Milwaukee became the ninth U.S. diocese to declare bankruptcy because of the burden of settlement claimes related to the sexual abuse of children by Catholic clerics.

According to a statement released today by the archdiocese: “[A]fter consultation with archdiocesan advisors, Archbishop Jerome E. Listecki directed attorneys for the Archdiocese of Milwaukee to file a petition for a Chapter 11 reorganization of its financial affairs under the U.S. Bankruptcy Code.  

“This action is occurring because priest-perpetrators sexually abused minors.

“Financial claims pending against the archdiocese’s means, recent failure to reach a mediated resolution with victims/survivors involved in lawsuits against the archdiocese, along with the November court decision that insurance companies are not bound to contribute to any financial settlement, made it clear that reorganization is the best way to fairly and equitably fulfill obligations.”

The statement continued: “In taking this action, there are two goals. First, the archdiocese wants to fairly compensate victims/survivors with unresolved claims  – both those with claims pending and those who will come forward because of this proceeding.  Second, the archdiocese wants to carry on the essential ministries of the archdiocese in order to continue to meet the needs of parishes, parishioners and others who rely upon the Church for assistance.

“A Chapter 11 reorganization is the best way to achieve these goals. It enables the archdiocese to use available funds to compensate all victims/survivors with unresolved claims in a single process overseen by a court, ensuring that all are treated equitably. In addition, by serving as a final call for legal claims against the archdiocese, the proceeding will allow the Church to move forward on stable financial ground, focused on its Gospel mission.”

CNN reports that a lawyer representing 23 victims of abuse blasted that explanation.

“The reality is that this is being done for one reason—to hide the names of those who have offended kids and those that have covered it up in the archdiocese for years,” said attorney Jeff Anderson.

David Clohessy of the Survivors Network of those Abused by Priests likewise condemned the move: “This is about protecting church secrets, not church assets. The goal here is to prevent top church managers from being questioned under oath about their complicity, not ‘compensating victims fairly.'”

Milwaukee priest Father Lawrence Murphy has been accused of molesting as many as 200 boys at St. John’s School for the Deaf over decades. He resigned from the post in 1974 and died in 1998. One of his alleged victims unsuccessfully attempted to sue the Vatican to force it to release the names of thousands of Catholic priests against whom credible accusations have been filed.

The archdiocese has failed to reach an out-of-court settlement with Murphy’s victims, and a court ruled in November that insurance companies were not required to help it pay off abuse claims.