Will Declaring Bankruptcy Harm the Victims of the Oakland Diocese?

As many already know, the Catholic church has a history of sexual abuse. In fact, several different dioceses around the United States are facing sexual abuse lawsuits due to the survivors that are coming forward to let it be known that they were sexually abused by the clergy in Catholic churches. This is not an issue only in Oakland or California. It is a worldwide problem in the Catholic Church. Now, the Catholic dioceses are flooded with lawsuits from child abuse victims that are demanding billions of dollars be paid in compensation for their damages.

On May 8, 2023, the Catholic News Agency announced that the Diocese of Oakland officially filed for bankruptcy because of the 330 lawsuits that were filed against them between 2020 and 2022. These lawsuits are claims against the clergy members of the Diocese of Oakland, stating that they sexually abused many different children throughout the years.

The Diocese of Oakland is one of the most recent dioceses to file for bankruptcy in response to the lawsuits they have received, and a few others are expected to declare bankruptcy in the near future. Since they filed for bankruptcy, they can continue to remain open and functioning the same while paying off their debts.

Are sexual abuse victims harmed by the Diocese of Oakland’s decision to file bankruptcy?

They could be. Even though the dioceses are claiming that they are filing bankruptcy to work together to help the victims of sexual abuse by the church, America Press, Inc. reported that many believe that the dioceses decision to seek bankruptcy is a way to protect themselves and their assets from the individuals who were harmed. Instead of giving the compensation that they owe to the victims, they may be moving around and hiding their money and other assets. The Survivors Network of those Abused by Priests (SNAP) stated that the bankruptcy is “an attempt to deny justice and transparency to the more than 330 survivors who have lawsuits for child sexual abuse pending against the Diocese.” SNAP went on to explain that the bankruptcy is a way to continue to hold onto their secrets, lies, and money as well as cover up child sexual abuse cases while still employing the perpetrators.

To understand how bankruptcy proceedings may actually affect victims, look at USA Gymnastics. Per Emory Law, USA Gymnastics filed for bankruptcy at the end of 2018 due to more than 100 lawsuits filed against the organization for sexual abuse, and the victims were still waiting to hear about a settlement two years later. At the end of 2021, a $380 million settlement was reached for the survivors who were sexually abused by Larry Nassar, a former USA Gymnastics doctor. However, it took over five years for these individuals to receive any answers about their cases. Emory Law explains that this is normal for bankruptcy cases. Filing for bankruptcy is a way of activating an automatic stay and “putting the victims’ litigation on hold.”

Organizations like the Catholic dioceses and USA Gymnastics take advantage of declaring bankruptcy to “gain unintended benefits at the expense of abuse victims.” The victims of abuse may eventually be awarded compensation, but they lose their ability to investigate and find answers regarding their abuse and ensure that the abuse will not happen to anyone going forward. The goal behind filing for bankruptcy is to put off the litigation process to prevent any further evidence and damages from being discovered. In 2020, it was reported that the Catholic Church in the United States had moved over $2 billion worth of assets to avoid giving the money to the victims who were abused by the church.

Is it even worth suing a church for sexual abuse and assault?

Yes, it is. It is always worth fighting to hold abusers accountable. But more important, know that just because a Diocese or other organization files for bankruptcy, that does not mean you cannot get justice. First, there is always a chance that the stay will be lifted; that is something our Los Angeles sexual assault attorneys will fight for in your case. Second, simply filing for bankruptcy doesn’t mean that the organization has no money – and in the case of an organization as powerful as the Catholic Church, rest assured there are always undisclosed assets. Part of the discovery process is the request for financial assets of the liable organization. If that organization lies about its assets, there could be additional civil and criminal consequences.

Which brings us to the final point: criminal charges are not affected by bankruptcy. So even if a civil claim is delayed, any pending criminal cases can still move forward. We understand that it might be frustrating; we just don’t want you to give up hope.

If you are ready to begin discussing your child sexual abuse claim, reach out to an experienced and skilled Los Angeles child sexual abuse attorney at Taylor & Ring at your earliest convenience. We provide free case evaluations to learn about your experience and answer any of your questions and concerns. Once we learn the facts of your claim, we can help you determine the best legal options that you should pursue. Call our office or submit our contact form to schedule a consultation today.