Catholic diocese in Minnesota files for bankruptcy over sex abuse

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By Jim Christie

<span class="articleLocation”>A Catholic diocese in Minnesota filed for
bankruptcy on Friday, joining more than a dozen other U.S.
Catholic districts and religious orders driven to seek
protection from creditors by the church’s clergy sex abuse

The Roman Catholic Diocese of New Ulm, which is southwest of
Minneapolis, said in a statement it will use Chapter 11
bankruptcy to reorganize its finances and produce a plan to pay

The rural diocese is defending 101 lawsuits involving
alleged sex abuse by clergy mostly from the 1950s through the
1970s. Minnesota had lifted the civil statute of limitations for
a period of three years ending May 25, 2016, allowing claims
from prior decades to be brought.

“It is unknown how long this will take, but we seek to
complete the reorganization process as promptly and efficiently
as possible,” the diocese said.

Bishop John LeVoir in a statement said reorganization would
allow the diocese “to fulfill its obligation, as much as
possible, to victims and survivors of clergy sexual abuse of
minors, while continuing to carry out its ministry.”

Bankruptcy provides a way for debtors and creditors to
resolve claims. The broader work within the Catholic Church of
rooting out sex abuse is being overseen by the Pontifical
Commission for the Protection of Minors, set up by Pope Francis
in 2014.

The diocese is the third in Minnesota to file for bankruptcy
in recent years over claims of clergy sex abuse.

Reports of sex abuse by priests and coverups by the Catholic
hierarchy exploded in U.S. media in 2002 and have pushed
prominent dioceses like Milwaukee’s into bankruptcy and have led
to about $3 billion in settlements.

The Diocese of New Ulm in court papers proposed the
appointment of U.S. Bankruptcy Judge Gregg Zive of Nevada to
serve as a mediator. The diocese said it has already been in
negotiations with lawyers for individuals who have brought sex
abuse claims.

“The diocese intends to continue these negotiations and
believes that a structured mediation setting would best
facilitate a resolution for all of the interested parties in
these cases,” the diocese said in its court papers.

Zive oversaw mediation of similar claims in the Chapter 11
bankruptcy of the Roman Catholic Diocese of Stockton,
California. The Stockton diocese received court approval for its
bankruptcy reorganization in January.

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