Archdiocese of Baltimore warns sexual abuse lawsuits under new law could lead to bankruptcy

The Archdiocese of Baltimore is warning parishioners that a new Maryland law enabling victims of child sexual abuse to file civil lawsuits could lead to “devastating financial consequences,” or even bankruptcy.

In a letter Tuesday addressed to “Friends in Christ,” Archbishop William E. Lori said he plans to consult in the coming days with various ordained and lay leaders about how the archdiocese should respond to the new law, which goes into effect Oct. 1. One approach under consideration, Lori wrote, is a bankruptcy reorganization that would compensate survivors of sexual abuse while allowing the nation’s oldest archdiocese to continue operations.

The letter, a copy of which was obtained by The Baltimore Banner, follows a yearslong investigation by the Maryland Office of the Attorney General into 80 years of sexual abuse in the Archdiocese of Baltimore. The 456-page report was the most comprehensive accounting in Maryland of sexual abuse in the church to date, and revealed more than two dozen previously unidentified abusers.

Maryland lawmakers voted to eliminate the statute of limitations for victims of child sexual abuse less than an hour after the release of the investigative report last spring detailing decades of abuse within Maryland churches.

The archdiocese at the time encouraged community members to lobby against the legislation, a move some attorneys called a “common defense tactic in the corporate malfeasance world.” Lori’s letter this week suggested the new law may violate the Maryland Constitution — but said it’s up to the courts to make that determination.

The letter acknowledges the archdiocese risks multiple new lawsuits once the law goes into effect. Dioceses elsewhere have filed for bankruptcy protection when facing the possibility of a flood of lawsuits and judgments over abuse that happened decades ago.

Several law firms have already announced plans to sue the Archdiocese of Baltimore on behalf of victims of priest sexual abuse. Law firms are advertising across the city to solicit survivors as clients. The prominent civil rights lawyer Ben Crump came to Baltimore and held a press conference in May, announcing plans to sue on behalf of clients when the law takes effect.

The law lifts age limits and time limits for filing civil lawsuits against institutions, including churches and schools, where an individual suffered sexual abuse as a child. The law also nullified a legal protection called a “statute of repose,” which could have insulated institutions from older claims.

“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,” Lori wrote in the letter. “The Archdiocese simply does not have unlimited resources to satisfy such claims; its assets are indeed finite.”

The archdiocese response, Lori said, will be driven by two goals — the healing of survivors and the continuation of ministries within archdiocese-supported parishes, schools, social service agencies and other organizations.

“We do not believe that these goals are mutually exclusive,” Lori wrote in the letter. “To that end, it is essential for the Archdiocese to pursue the best possible solution to meet both goals.

A bankruptcy reorganization would allow the archdiocese to use unrestricted assets to satisfy claims and pay various costs. Financial contributions donated for specific purposes, such as food and shelter assistance or support for expectant mothers, would not be affected.

Kathleen Hoke, a University of Maryland, Baltimore law professor, said that although it’s legal for the church to file for bankruptcy, it is completely counter to the original purpose of Chapter 11, which was intended to be used as a stabilizing mechanism for failing businesses to repay creditors.

”And I think it completely undermines the entire purposes of the Child Victims’ Act and is certainly not turning the other cheek as Jesus would say,” said Hoke, who played a key role in drafting the new law.

Though Hoke stressed that survivors can still pursue litigation under the new law, she said that a bankruptcy filing by the archdiocese would “complicate matters tremendously” for them, resulting in some survivors with successful legal claims receiving only “pennies on the dollar” in damages.

”We’re likely to have some folks who just aren’t ready to come forward only to essentially have their claims extinguished because of a bankruptcy process,” Hoke said. “And that’s the worst part.”

The Banner published a series of stories in May and June that identified seven church figures who had been accused of child sexual abuse, but whose names had been redacted from the attorney general’s report on the history of abuse in the church. Banner reporters used court documents, archdiocesan records, church directories, school yearbooks, census and property records to identify the six men and one woman. The Baltimore Sun also identified three accused church figures and five archdiocese officials whose names are redacted in the 456-page report. A Baltimore judge last month ordered redactions to be lifted for 43 names in the report and cited the news articles in some instances.

lillian.reed@thebaltimorebanner.com

tim.prudente@thebaltimorebanner.com

brenna.smith@thebaltimorebanner.com

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