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Camden, NJ Catholic Diocese Files Bankruptcy Over Sex Abuse Claims


The Roman Catholic Diocese of Camden, New Jersey, filed Chapter 11 bankruptcy protection last week citing dozens of childhood sexual abuse claims that have been filed after New Jersey extended the statute of limitations on such sex crimes. The diocese also indicated the ongoing COVID-19 pandemic and related challenges played a role in the bankruptcy protection filing.

“The effects of the pandemic, which have curtailed our revenue and deeply impacted our parishioners and neighbors, were further compounded by the over $8 million we have paid out this year through the New Jersey Independent Victims Compensation Program to victims of clergy abuse, money which we have had to borrow,” Bishop Dennis Sullivan said in a message.

“If it were just the pandemic, or just the costs of the Victims Compensation Program, we could likely weather the financial impact; however, the combination of these factors has made that impracticable,” he wrote.

Initial court filings indicate the diocese is currently involved in 52 lawsuits related to sexual abuse of children by clergy dating back decades. The diocese indicated it expects to see as many as 140 additional lawsuits filed after the December 2019 change in the law extended the statute of limitations.

According to NJ.com, the bishop said the decision, which he referred to as an overall “reorganization,” was made to allow for the fair compensation of child sex abuse victims, payment of debts to the diocese’s creditors, and to safeguard its assets.

“It became clear that reorganization is the soundest option to provide those who have been abused an equitable share of the funds available, and also to ensure the future financial health of the diocese,” he said. “The Chapter 11 reorganization is aimed at the maximum fairness and equity possible to address the remaining abuse claims, streamline substantial legal expenses, and avoid the race to the courthouse which would likely cause later claimants to be left without a remedy.”

The diocese’s parishes are reportedly separate legal entities under state law, and are therefore not part of this bankruptcy filing.

“We will be working with the court to ensure that our ministries are protected and that we continue to provide the needed services to so many in our diocese and the greater community we serve,” Sullivan said. “I must emphasize that this decision will have no direct effect on our schools, parishes, or pension plans.”

NJ.com also reported that a personal injury law firm representing Catholic Church survivors in over a dozen suits against clergy in the diocese believes the organization is shirking their responsibility to victims through the bankruptcy filing.

“The Diocese is running from accountability,” attorney Greg Gianforcaro, who has partnered with Jeff Anderson & Associates in the suits, said in a statement. “Instead of standing up for the people entrusted to their care and acknowledging the harm done to children for which they are responsible, the Diocese is taking drastic, self-serving measures to ensure the truth is suppressed.”

Reverend Robert E. Hughes, the diocese’s vicar general, said that since 1990 the diocese has paid out more than $10 million to settle 99 claims from survivors. Moreover, the diocese has paid out more than $8 million to resolve another 71 claims handled by a larger victim compensation fund formed by all of New Jersey’s Catholic dioceses and archdiocese.

“Through this reorganization, the diocese seeks to ensure that fair, equitable, and reasonable recoveries are available to individuals with bona fide claims through an expedited resolution mechanism,” Hughes said in a public declaration. “We will work with all stakeholders to address the historical tragedies and continue to provide critical programs for generations to come.”

The diocese reportedly serves six counties in southern New Jersey and is home to nearly 500,000 Catholics. There are 62 parishes, 124 active priests, 88 retired priests, 31 resident priests, and more than 100 permanent deacons, both retired and active, according to the declaration. There are 22 elementary and five high schools in the diocese serving more than 5,000 students.

The diocese recently created a website for survivors or anyone with questions regarding the reorganization process.