BALTIMORE (OSV News) — Archbishop William E. Lori told Catholics Sept. 5 that the Archdiocese of Baltimore is considering Chapter 11 bankruptcy reorganization as one option to deal with lawsuits expected to be filed when the state’s Child Victims Act takes effect Oct. 1.

The law, passed by the Maryland General Assembly earlier this year, removed any statute of limitations for civil suits involving child sexual abuse. It caps suits against public institutions such as government schools at $890,000, and for private individuals or institutions such as churches at $1.5 million.

The previous law allowed such suits for people up to age 38, an increase from the previous age limit of 25. At the time, the Maryland Catholic Conference — which includes the Archdiocese of Baltimore as well as the Archdiocese of Washington and the Diocese of Wilmington, Delaware, which both include Maryland counties — supported the increase to age 38.

In his Sept. 5 letter, the archbishop said he has two overarching goals as the archdiocese considers its response: “the healing of victim-survivors who have suffered so profoundly from the actions of some ministers of the church” and “the continuation and furtherance of the many ministries of the Archdiocese that provide for the spiritual, educational, and social needs of countless people — Catholic and non-Catholic — across the state.”

The archbishop said he plans to prioritize both goals. “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.”

He said, “The underlying issue that has led us to this place is indeed horrific. Innocent children were harmed, and lives were ruined. Please join me in praying for their healing and for the Holy Spirit’s gifts of Wisdom and Counsel as we undertake the decisions that lie ahead.”

Law firms and attorneys have been advertising extensively in the Baltimore and Washington markets since Child Victims Act was passed, encouraging victims of clergy sexual abuse to come to them for advice and help filing a claim. Some of the ads have also solicited those who may have been abused in public and private schools.

The archbishop said the archdiocese will likely face multiple lawsuits, but that the exact number is hard to predict.

“Litigating them individually would potentially lead to some very high damage awards for a very small number of victim-survivors while leaving almost nothing for the vast majority of them. The archdiocese simply does not have unlimited resources to satisfy such claims; its assets are indeed finite,” he said.

In that light, Chapter 11 bankruptcy reorganization — which allows a for-profit or nonprofit institution to continue operating within its purposes — could help the archdiocese meet the needs of helping victims while continuing its ministries, including supporting parishes, schools and charitable work. This differs from a Chapter 7 bankruptcy in which an entity is closed and all its assets are sold off to satisfy creditors.

“In this type of reorganization (Chapter 11), 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.

He acknowledged that the archdiocese is able to minister due to the generosity of the Catholic faithful. He noted that “the Annual Appeal for Catholic Ministries provides meals and shelter for our neighbors in need, support for moms experiencing difficult pregnancies, immigration outreach, programs for adults with disabilities, tuition assistance and many other ways we live out our faith.

“Fortunately, in a bankruptcy reorganization process, gifts given for specific purposes such as the Annual Appeal are strictly limited to the stated intentions of the donor. This is also true of any gifts given to parishes for specific purposes,” he said. “Should we file for bankruptcy, the Archdiocese would use its unrestricted assets to satisfy claims and pay various costs.”

Those funds will likely include insurance, which is typical in the case of diocesan bankruptcy reorganization. As of August 2023, 32 dioceses or archdioceses have begun or completed bankruptcy reorganization, as well as three religious orders.

Archbishop Lori said he would consult widely with clergy and laity about the options to address the goals of healing victim-survivors and continuing ministry. That is likely to include the Board of Financial Administration, the mostly lay finance council of the archdiocese — required by canon (church) law — made up of experts in law and finance. It also will include the college of consultors, a body of clergy also required by canon law, and online meetings open to all priests
of the archdiocese.

The consultation also will involve school principals and presidents and the Archdiocesan Pastoral Council, another lay group with representatives from various regions and ministry groups.

In standard practice, the archdiocese offers to pay for counseling for victim survivors and sometimes for family members — with a therapist of the victim-survivor’s choice — for as long as necessary for healing.

Since the early 1980s, the archdiocese has paid more than $13.2 million to 301 victim-survivors for counseling and direct payments. As part of this pastoral outreach, in 2007 the archdiocese began a mediation program with a retired, non-Catholic judge which has resulted in 105 settlements for a total of $6.8 million. Offers of counseling assistance and mediations are made to victim-survivors regardless of how long ago the alleged abuse occurred and without regard to legal liability.

“In the Archdiocese of Baltimore, we have for the last 16 years offered voluntary settlements through a mediated settlement program to victim-survivors even though their claims in civil courts were blocked by Maryland’s statute of limitations,” Archbishop Lori said in his message to the faithful. “We do so because we believe it is the right thing to do to promote healing.”

He said the new law’s different approach, permitting civil lawsuits for actions that occurred decades ago, may violate Maryland’s Constitution. “The courts will need to make that determination,” he said.

A redacted report from the Maryland Attorney General that studied abuse within the archdiocese over the course of 80 years includes information on more than 600 victims of child sexual abuse by 156 people affiliated with the church in that time span.

A chart accompanying Archbishop Lori’s pastoral letter in response to the report shows that the first incidents of child sex abuse per victim in the attorney general’s report peaked in the late 1960s through the 1970s, dropping sharply by the end of the 1990s. There have been no new allegations against those related to the church since 2010.