The archdiocese of Oregon today filed for bankruptcy, becoming the first Roman Catholic diocese in the US to seek financial protection from sexual abuse lawsuits.
In a letter posted on the archdiocese's website yesterday, the archbishop of Portland, John Vlazny, said the latest multimillion dollar demands for compensation and punitive damages had forced the diocese to seek protection while it reorganises its finances.
The diocese and its insurers have already paid out more than $53m to settle over 130 claims dating to 1950 by people who say they were abused by priests. The bankruptcy filing includes claims against the diocese from 20 pending priest abuse lawsuits, ranging from $5.1m to $135m.
"This is not an effort to avoid responsibility. It is, in fact, the only way I can assure that other claimants can be offered fair compensation," Archbishop Vlazny said in his letter.
He said that two cases went to trial yesterday, one seeking $130m and the other $25m.
"We have made every effort to settle these claims fairly but the demands of each of these plaintiffs remains in the millions. I am committed to just compensation. These demands go beyond compensation. With 60 other claims pending, I cannot in justice and prudence pay the demands of these two plaintiffs," he added.
One of those going to court was James Devereaux, who says he was repeatedly raped by the late Rev Maurice Grammond beginning in 1964. Grammond has been accused of sexually abusing more than 50 boys in the 1980s.
Mr Devereaux, 52, said: "We will continue our fight to finally get the archdiocese to accept the sin of its crimes."
David Slader, an attorney representing those claiming abuse, accused Archbishop Vlazny of lying about the church's assets, and said the church was simply trying to avoid the details of the lawsuits coming out in court.
"The archdiocese is one of the wealthiest corporations in Oregon," Mr Slader said. He said the archdiocese owns over $500m in tax-assessed properties, and has many investments.
No other American diocese has filed for bankruptcy, though Boston threatened to do so at the height of the abuse crisis that erupted there two years ago. The Diocese of Tucson, Arizona, has said it will decide whether to seek court protection before an abuse trial there in September.
Bud Bunce, spokesman for the 356,000-member archdiocese, said church operations will continue as usual.
"All the parishes will continue with their regular services," Mr Bunce said. "For the most part we anticipate the normal, everyday types of activities we do will continue."
Chapter 11 bankruptcy frees an organisation from the threat of creditors' lawsuits while it reorganises. However, it also could open church records to public scrutiny, and could require church leaders to cede some financial control to the courts. Mr Bunce declined to disclose the value of church assets.
Grammond served as a priest throughout the state of Oregon from 1950 to 1985, when he took sick leave. Allegations of sexual abuse against Grammond were first reported in 1991, but the charges didn't become public until 1999 when a former altar boy sued him and the archdiocese. Grammond was suspended when he refused to fully cooperate in the church investigation. In a deposition taken before his death, Grammond said, "I'd say these children abused me. They'd dive in my lap to get sexual excitement."
The Archdiocese of Boston was flooded with hundreds of civil lawsuits and considered bankruptcy, but opted to sell church real estate worth millions to settle claims.
Across the US, abuse cases are known to have cost the church more than $650m since 1950. Still, relatively few molestation lawsuits have gone to trial; many settle beforehand. The Rev Thomas Reese, editor of the Jesuit magazine America, said dioceses are required under canon law to seek Vatican permission before filing for bankruptcy. But he said bishops under severe financial strain could be forced to act without Rome's approval.
"If you don't have any money, it really doesn't matter what the Vatican thinks," Rev Reese said.
Considering the hundreds of pending abuse claims nationwide and the multimillion-dollar settlements that have already been reached, Rev Reese said he was surprised it took so long for a diocese to file for bankruptcy. He predicted others would follow.
Bill Crane, 38, who heads the Oregon Survivors Network for those abused by priests, said he moved to Oregon from New Jersey, where he and his twin brother were molested as boys by the Rev. James Hanley.
"The Vatican needs to sell a few paintings if they think they can't afford to pay for this," he said.
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