Roman Catholic Diocese of Camden declares bankruptcy, citing costs of COVID-19 and allegations of priest abuse

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The Roman Catholic Diocese of Camden filed for bankruptcy on Thursday, becoming the first in the state to seek protection from financial claims since Gov. Phil Murphy signed a bill last year allowing victims of sexual abuse decades old to new prosecution opportunities.

Bishop Dennis J. Sullivan cited the more than $ 8 million the church has paid victims so far in settlements and judgments as well as lost revenue since the start of the coronavirus pandemic in a letter explaining the decision to Catholic faithful in southern Jersey.

“If it was just the pandemic, or just the costs of the victim compensation program, we could probably overcome the financial impact,” he wrote. “However, the combination of these factors made it impossible. “

With its filing, the Diocese of Camden joins more than 20 dozen others across the United States who have sought similar protection since the clergy sexual abuse scandal first erupted in Boston 18 years ago. , including Harrisburg, who filed for bankruptcy in February.

Camden’s case came hours after the Rockville Center Diocese of Long Island, New York, became the largest in the United States to seek similar legal aid for its debts to date.

All cited similar economic tensions. But signs of financial trouble had been brewing in Camden for months.

Sullivan announced in July that the diocese would suspend all payments from a victims’ compensation fund set up to offer out-of-court settlement payments, citing a “precipitous drop in revenues.” The fund had paid out $ 7.6 million, but some victims’ claims remained unresolved and a spokesperson said at the time he was unsure how many complaints would go unresolved.

READ MORE: Roman Catholic Diocese of Camden suspends payments to victims of clergy abuse, citing financial stress from COVID-19

Church leaders had hoped to fend off a flood of lawsuits authorized by state law of 2019 that opened a temporary two-year window to sue based on claims that were previously time barred. Despite this, the diocese still faces more than 50 lawsuits from accusers whose claims remain pending in the courts.

In his letter on Thursday, the bishop said he approved the decision to declare bankruptcy with the hopes it would allow the church to continue serving Catholics in the area while ensuring that survivors of abuse could continue to receive compensation.

But lawyers for victims of sexual abuse have said that by seeking to limit its exposure to civil lawsuits by protecting its assets in bankruptcy court, religious leaders are dodging the moral debt they owe victims.

“The diocese is shirking responsibility,” said lawyer Greg Gianforcaro, whose office has filed more than a dozen lawsuits against clergy in the diocese. “Instead of standing up for those in their care and acknowledging the harm done to the children for whom they are responsible, the diocese is taking drastic and selfish steps to ensure that the truth is removed. “

The Diocese of Camden oversees nearly half a million Catholics in 62 parishes in Atlantic, Camden, Cape May, Cumberland, Gloucester and Salem counties.

He told the court in his documents on Thursday that he had more than 200 creditors and an estimated liability of $ 25.7 million. The largest of these was $ 25 million owed to PNC Bank. The diocese also cited 17 unresolved complaints – the majority of which concern allegations of sexual abuse by priests – for which it could still be ordered to pay high-profile judgments.

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His classified real estate assets worth $ 53.6 million, including the diocesan headquarters at 631 Market Street in Camden, as well as cars and several jewelry like a gold cross adorned with Pope Pius X jewelry.

Bankruptcy should not affect diocesan schools, parishes or pension plans, Sullivan said. Parishes are separate legal entities under state law and are not included in filing for bankruptcy.

“We will work with the court to ensure that our ministries are protected and that we continue to provide necessary services to so many people in our diocese and in the larger community we serve,” said the bishop.

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