Archdiocese of Saint Paul and Minneapolis Announces Bankruptcy Reorganization

The Archdiocese of St. Paul - Minneapolis on Jan.16 became the 12th U.S. Catholic diocese to file for bankruptcy protection—and the second largest ever to do so (after San Diego)—because of the increasingly unmanageable costs of settlements and future claims that have resulted from sexual abuse committed by clergy. In a statement released to coincide with the bankruptcy announcement, Archbishop John Nienstedt said, explaining the filing, "I make this decision because I believe it is the fairest and most helpful recourse for those victims/survivors who have made claims against us. Reorganization will allow the finite resources of the Archdiocese to be distributed equitably among all victims/ survivors. It will also permit the Archdiocese to provide essential services required to continue its mission within this 12-county district."

According to a statement at the archdiocesan website: "This is the fairest way to resolve existing sexual abuse lawsuits as well as future claims while permitting the archdiocese to continue essential ministry and support to local people, parishes and Catholic schools.

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"The archdiocesan corporation is in this position because of the scourge of sexual abuse of minors. The decision to file for Reorganization was reached after months of prayer, careful consideration and consultation with legal, financial, and other experts, various representative clergy and lay leadership groups as well as input from plaintiffs’ attorneys."

The statement continues: "We are not using reorganization as a tool to avoid compensating sexual abuse victims/survivors; just the opposite is true. Reorganization is the best way to respond with fairness to all victims/survivors by allowing the available funds to be distributed equitably to all victims/survivors."

Nienstedt added, "We have all been devastated by revelations of the stories from those who have been hurt by clergy sexual abuse. Victims, survivors and their loved ones have personally shared their heartbreaking stories with me. I have sensed their anger, their sorrow, and their intense sense of betrayal because of these unthinkably evil deeds. I deeply regret their suffering. I hope to do all I can to assist them toward healing.

"We must come together to care for all those who have been hurt during this tragic time in our church’s history. As announced in October, we are continuing to work with those representing victims/survivors to make sure we are doing all we can to prevent sexual abuse of minors, as well as to be instruments of healing for those who have been abused."

According to the statement from the archdiocese, local Minneapolis-St. Paul parishes and Catholic schools are separately incorporated and will not be affected by the reorganization filing.

The embattled Archbishop Nienstedt has frequently been criticized for his handling of a number of specific cases of clerical sexual assault and has been personally the subject of an investigation for improper behavior. In his statement, he concluded, "We still have a long journey ahead as we restore trust through humility, competency and transparency, in order to respond with compassion to all those who have been hurt, to continue to atone for sins that have been committed, and to foster healing. The filing for reorganization marks another important step on our way forward as a local church."

The Associated Press reports that according to the filing the archdiocese is estimated to have assets between $10 to $50 million and liabilities between $50 to $100 million. The filing also estimates 200 to 300 creditors.

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