January 4, 2011 / 8:26 PM / 7 years ago

Milwaukee archdiocese to file for bankruptcy

MILWAUKEE (Reuters) - Milwaukee’s Roman Catholic archdiocese will file for bankruptcy, citing the financial drain from unresolved lawsuits brought by victims of sexual abuse by priests.

Archbishop Jerome Listecki said in a statement posted on the church’s web site that the move to file for Chapter 11 reorganization grew out of a November court decision that insurance companies are not bound to contribute to financial settlements with victims.

Mediation efforts in many of the suits have failed, he added.

The aim is to pay pending claims by victims of abuse and “to continue to meet the needs of parishes, parishioners, and others who rely upon the Church for assistance,” Listecki said in the statement.

Several U.S. Catholic dioceses have filed for bankruptcy since the Portland, Oregon, diocese took the drastic step in 2004. Dioceses that have entered bankruptcy because of sexual abuse claims include San Diego, California; Spokane, Washington; Wilmington, Delaware; and Davenport, Iowa.

In Milwaukee, the 185-year-old diocese said it had spent more than $29 million over two decades to cover the legal costs of priest abuse.

“Since 2002, we have sold property, liquidated savings and investments, eliminated ministries and services, cut archdiocesan staff by nearly 40 percent, and put all available real estate on the market in order to free up resources,” settling nearly 200 cases, the church said on its web site.

The priest abuse scandal that first struck many U.S. dioceses a decade ago has cost the U.S. church in more ways than one.

“The scandal had a double negative impact -- it increased the outlay for compensation to deal with the cases, and it also reduced contributions” from parishioners appalled by the disclosures, said Tom Smith of the Center for the Study of Politics and Society at the University of Chicago.

In March 2010, Milwaukee’s diocese dealt with explosive charges that a now-dead priest molested some 200 boys at a school for the deaf over more than two decades.

Listecki apologized to the victims and acknowledged the church was wrong to not defrock the priest, Rev. Lawrence Murphy. Some of the lawsuits claimed Pope Benedict, then in a different role at the Vatican, helped suppress the church prosecution of Murphy.

Over the past five years the cost to U.S. Catholic dioceses of settling U.S. sex abuse cases involving priests has totaled nearly $2 billion, according to the Center for Applied Research in the Apostolate at Georgetown University in Washington.

Overall, there are 65 million U.S. Catholics, a population stabilized by an influx of Latino immigrants. About 22 percent of U.S. adults claim to be Catholic.

The Milwaukee diocese has seen its congregations shrink by 5 percent over the past two years to fewer than 650,000 parishioners.

Reporting by John Rondy and Andrew Stern; Editing by Jerry Norton

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