Baltimore Archdiocese Considers Bankruptcy Amid Possible Sex-Abuse Lawsuits
Effective Oct. 1, new law will allow a victim of child sex abuse to sue private entities for up to $1.5 million if he or she can show the organization failed to properly respond to sexual abuse that occurred under its watch.
The Archdiocese of Baltimore will consider filing for bankruptcy as it awaits the implementation of a new law that will end the statute of limitations for civil lawsuits for negligence in relation to child sexual abuse.
Effective Oct. 1, the law will allow a victim of child sex abuse to sue private entities for up to $1.5 million if he or she can show the organization failed to properly respond to sexual abuse that occurred under its watch. Previously, the statute of limitations was seven years after the victim’s 18th birthday.
Because the new law will apply retroactively, victims whose statute of limitations had already passed will be able to file lawsuits against private entities. An attorney’s general report from April accused the archdiocese of covering up child sex abuse for decades, and the archbishop believes this law could lead to multiple lawsuits that could have “devastating financial consequences” for the archdiocese.
Archbishop William Lori issued a public statement Tuesday that said the archdiocese has two goals: “the healing of victim-survivors” and “furtherance of the many ministries of the archdiocese that provide for the spiritual, educational, and social needs of countless people.”
“An approach under consideration to meet both of our stated goals is seeking relief through a bankruptcy reorganization — establishing a reasonable and equitable method for compensation of victim-survivors while also preserving the many vital ministries of the archdiocese,” the archbishop said. “In this type of reorganization, the archdiocese would be required to provide resources which would be used to compensate victim-survivors while at the same time ensuring our mission can continue.”
Archbishop Lori said the archdiocese will prioritize both goals, which he said are not mutually exclusive.
“As the spiritual leader of this archdiocese, it is incumbent upon me to meet the needs both for healing for those who have suffered tremendous harm by the actions of some ministers of the Church as well as the needs of those who currently rely upon the Church’s ministries,” the archbishop added. “We do not believe that these goals are mutually exclusive. To that end, it is essential for the archdiocese to pursue the best possible solution to meet both goals.”
Archbishop Lori said the number of lawsuits is “hard to predict” but that litigating them individually could yield “very high damage awards for a very small number of victim-survivors” and leave “the vast majority of [other survivors]” with almost nothing.
“The archdiocese simply does not have unlimited resources to satisfy such claims; its assets are indeed finite,” Archbishop Lori said.
The archbishop added that donations given for specific purposes, such as for the annual appeal or any other gifts, are strictly limited to the stated intentions of the donor under a bankruptcy reorganization. Only the archdiocese’s unrestricted assets would be used to support the legal battles and compensation for victims.
Per the legislation, the statute of limitations also ended for lawsuits against public entities, but the compensation was capped at $890,000 for such lawsuits, which is far lower than lawsuits against private entities, which is capped at $1.5 million.