Catholic diocese of Helena files for bankruptcy protection amid child sex abuse lawsuits

  • Article by: MATT VOLZ , Associated Press
  • Updated: January 31, 2014 - 5:31 PM

HELENA, Mont. — The Roman Catholic Diocese of Helena filed for bankruptcy protection Friday as part of a proposed $15 million settlement for hundreds of victims who say clergy members sexually abused them over decades while the church covered it up.

The Chapter 11 bankruptcy reorganization plan comes after confidential mediation sessions with the plaintiffs' attorneys and insurers, resulting in a proposed deal to resolve the abuse claims, diocese officials said.

Bishop George Leo Thomas expressed "his profound sorrow" and apologized to the victims in a news conference.

"I know the pain is real, the pain is in the present tense, and in the name of the church, I want to say I'm sorry and we're sorry as a church," Thomas said.

The $15 million "will at least be a beginning point for people who are seeking resolution in their lives and in their hearts," he added.

In addition to the money, the diocese must publicly apologize, publish the names of clergy members who have been credibly accused of abuse, offer to meet with abuse survivors, provide victim counseling and reinforce its policies and procedures to prevent abuse, plaintiffs' attorneys said.

The diocese already has set up abuse-prevention programs, including worker screenings, a claims-review board and a hotline to report abuse.

The settlement details are being worked out, but the U.S. Bankruptcy Court in Montana would be responsible for approving and supervising the disbursement of $15 million to compensate the 362 victims identified in the two lawsuits.

In addition, at least $2.5 million will be set aside for victims who come forward later, according to the diocese.

The church anticipates paying that $2.5 million, with the rest paid by insurers.

The victims and creditors will have the chance to vote on the proposed settlement, diocese officials said.

Church officials are planning to pay the diocese's share of the settlement with cash, though they may have to sell some property in the future, Thomas said.

The diocese was in a precarious financial position before the lawsuits were filed, and a reorganization was already likely, he said.

Court documents filed Friday show the diocese has estimated assets between $1 million and $10 million, and estimated liabilities between $10 million and $50 million.

Molly Howard, an attorney for the plaintiffs in one of the lawsuits, said she believes the bankruptcy process will resolve the case more quickly than years of litigation and trials with uncertain outcomes.

"Given the age and ill health of many of the victims, this is in their best interest," Howard said.

The Helena diocese is the 11th in the nation to seek bankruptcy protection in the face of sex-abuse claims.

David Clohessy, the executive director of the Survivors Network of those Abused by Priests, criticized the diocese for seeking bankruptcy protection, saying it will allow church officials to keep records closed that might have come out in a trial.

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