San Francisco archdiocese files for Chapter 11 bankruptcy

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San Francisco bankrupcty
San Francisco Archbishop Salvatore J. Cordileone, seen here in a 2021 file photo, announced Aug. 21, 2023, the archdiocese was filing for Chapter 11 bankruptcy in order to resolve approximately 500 clergy sex abuse cases resulting from California's temporary lifting of the statutes of limitations for such cases from 2019-2022. (OSV News photo/Bob Roller)

SAN FRANCISCO (OSV News) — Archbishop Salvatore J. Cordileone of San Francisco announced Aug. 21 the archdiocese has filed for Chapter 11 bankruptcy reorganization “to facilitate settlements” with survivors of clergy abuse.

The decision came after much reflection and prayer, and consultation with the archdiocese’s financial and legal advisers, he said in a letter to the faithful.

In an earlier Aug. 4 statement, Archbishop Cordileone had warned a bankruptcy filing was imminent, and in his new Aug. 21 letter he reiterated the reason for this: “the impact of more than 500 civil lawsuits that have been filed against the Archdiocese under state law AB-218, which allowed individuals to bring claims for childhood sexual abuse that otherwise would have been barred due to the expiration of the statute of limitations.”

Some lawsuits alleging child sexual abuse by priests and other employees of the archdiocese, as well as volunteers go back decades.

The archbishop told the faithful Aug. 21 that “it is important to know that the overwhelming majority of the alleged abuse occurred in the 1960s and ’70s, and into the ’80s, and involved priests who are deceased or no longer in ministry. A significant number of these claims include unnamed individuals or named individuals who are unknown to the Archdiocese.”

Compassionate and equitable solution

“We believe the bankruptcy process is the best way to provide a compassionate and equitable solution for survivors of abuse while ensuring that we continue the vital ministries to the faithful and to the communities that rely on our services and charity,” the archbishop said.

At least 31 U.S. Catholic dioceses and archdioceses, not including San Francisco, have filed for Chapter 11 bankruptcy as of August 2023, according to Marie T. Reilly, a professor at Penn State Law and an expert in bankruptcy and commercial law. Some 21 have settled their cases, with the Diocese of Syracuse most recently doing so in June.

The Diocese of San Diego, which had filed in 2007, advised in February that it was considering a second filing. In May, diocesan attorney Marcia Roberts told media the diocese expected to officially file for Chapter 11 in November.

Since 2002, two “open window” periods have taken place for the archdiocese, where the California Legislature temporarily waived statute of limitations, allowing individuals to bring forth claims of childhood sexual abuse under civil law. The first took place for one year starting Jan. 1, 2003; the second for three years starting in 2019 and ending Dec. 31, 2022.

The 2002 period “resulted in the Archdiocese of San Francisco selling excess property and drawing on insurance coverage to pay approximately $68 million to roughly 100 plaintiffs to settle claims,” Archbishop Cordileone said in his Aug. 4 statement, adding that within the three-year period, more than 500 civil lawsuits were filed against the archdiocese and the trial for one of the initial cases was “imminent.”

Bankruptcy filing

In his Aug. 21 letter, Archbishop Cordileone emphasized that “only the legal entity, The Roman Catholic Archbishop of San Francisco, a Corporation Sole, is included in the Chapter 11 filing.”

“Our parishes, schools, and other entities are not included in the filing. Our mission will continue as it always has,” he explained. “Parishes will serve the spiritual needs of the faithful, celebrating Mass, offering the Sacraments, and providing religious education. Schools will provide the best Catholic education for students, and our Chancery will continue to support parishes and schools, and its ministries will remain engaged in the community.”

Operations also will continue “as usual” for Catholic Charities, Catholic cemeteries and St. Patrick’s Seminary and University in Menlo Park, he said, adding the process will also not affect chancery employee wages and benefits.

He made clear that contributions to the parish offertory or the archdiocesan annual appeal “will not be used to settle abuse claims.”

Committed to healing of survivors

Archbishop Cordileone added he remains “committed to the healing and care of survivors who have suffered irreversible harm because of the sins of the Church’s ministers and (I) ask you to join me in praying for our Archdiocese, parish communities, schools, and all survivors of sexual abuse.”

He said the archdiocese has had protocols in place for years now “to safeguard against abuse” by maintaining and improving “awareness and education for children and adults” and using “stringent processes to screen volunteers, employees, and priests.”

Prayer is needed “now more than ever,” Archbishop Cordileone said, urging all to “commit yourselves, or recommit, to living the consecration of our Archdiocese to the Immaculate Heart of Mary.”

He concluded his letter by encouraging the faithful to show “Christian solidarity” on a daily basis “in praying the rosary, spending an hour each week in adoration before the Blessed Sacrament, and fasting on Fridays for the survivors of abuse, for the mission of our Archdiocese, and for the eradication of this shameful crime from our society as a whole.”

“God is pleased by such prayer and penance,” the archbishop said, “and doing so will open our hearts to the blessings He wishes to lavish upon us.”

OSV News

OSV News is a national and international wire service reporting on Catholic issues and issues that affect Catholics.