SAN JUAN, Puerto Rico — Puerto Rico's Archdiocese of San Juan filed for bankruptcy on Wednesday after officials embargoed $4.7 million from its accounts following a lawsuit filed by retired Catholic school teachers seeking their pensions.
Archdiocese attorney Carmen Conde told The Associated Press that the filing was a last recourse. She said roughly 75 fulltime and part-time employees are affected, along with dozens of parishes across the U.S. territory. She said the Archdiocese cannot pay its water or power bills, has halted all charity work and is relying on a group of volunteers.
"The Archdiocese no longer has money to operate," she said. "The embargo caused an economic and administrative crisis."
A judge earlier this year ordered the Archdiocese to pay $4.7 million worth of pensions to both active and retired teachers working at dozens of its schools. The ruling comes two years after Archdiocese officials informed several hundred teachers that their pensions would be eliminated because payouts exceeded contributions, which led to the lawsuit. Enrollment at Catholic schools in Puerto Rico has plunged with hundreds of thousands of families leaving the island for the U.S. mainland amid a 12-year recession.
Antonio Bauza, an attorney who is representing 178 teachers who work or have worked at three different schools, told the AP that he is not surprised by the bankruptcy filing.
"They have used all kinds of tactics to not comply with the pensions of these retired teachers," he said. "There are teachers who have lost their homes. It's a very serious situation."
In a June filing, Bauza and another attorney wrote that the teachers are mostly elderly people who are suffering irreparable damage.
Conde said it's the first time the Archdiocese has filed for Chapter 11 bankruptcy. She said officials embargoed 21 Archdiocese accounts that hold a total of $606,000 and froze another 12 accounts that have nearly $341,500 in them. In addition, officials also froze 160 accounts belonging to dozens parishes that hold a total of $3.8 million.
She said the Archdiocese will be filing a document with more details, but that it has assets ranging from $10 million to $50 million, along with debts of that same amount.