Minn. diocese files for bankruptcy following sexual abuse award

Published 10:09 am Friday, December 18, 2015

MINNEAPOLIS — The Diocese of Duluth, a sprawling but sparsely populated Roman Catholic diocese in northeastern Minnesota, filed an emergency petition for federal bankruptcy protection Monday after a jury found it partially responsible for millions of dollars awarded in a clergy sex abuse case last month.

The diocese said the move for Chapter 11 reorganization was necessary after efforts to reach a resolution with all abuse victims were unsuccessful. The diocese is the 15th U.S. diocese or religious order to seek bankruptcy protection in the face of sex abuse claims.

“There is sadness in having to proceed in this fashion,” the diocese’s vicar general, the Rev. James Bissonette, said in a statement on the diocese’s website. He said given the “magnitude of the verdict, the Diocese was left with no choice but to file for reorganization.”

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In November, a Ramsey County jury awarded $8.1 million to a man who says he was molested by a priest in northern Minnesota more than 35 years ago when he was a boy. The diocese was held responsible for $4.8 million.

Bissonette said the bankruptcy filing safeguards the diocese’s limited assets while allowing the church’s day-to-day operations to continue. The diocese has more than 56,000 Catholics in 10 counties of northeastern Minnesota, extending south to Pine City, north to the Canadian border and west to Cass Lake.

The diocese’s operating budget for the last fiscal year was nearly $3.3 million. Even with insurance coverage and some available savings, the diocese said it could not cover the verdict, and no money would be available for remaining abuse victims who have brought claims.

William Weis alleged he was sexually abused by the Rev. James Fitzgerald at St. Catherine’s parish in Squaw Lake in 1978. The lawsuit centered on whether the Diocese of Duluth was negligent in how it supervised Fitzgerald, who died in 2009.

Weis was identified as Doe 30 in his lawsuit. The Associated Press normally does not identify possible victims of sex crimes, but one of Weis’ attorneys, Mike Finnegan, said Weis agreed to the use of his name.

The jury found the diocese was 60 percent at fault. Fitzgerald’s order, the Oblates of Mary Immaculate, based in St. Paul, was found to be 40 percent at fault.

Finnegan said Monday the bankruptcy filing delays attempts to force the release of church documents on clergy sex abuse that Weis has sought to make public. A hearing on the issue had been set for Dec. 17.

For Weis, releasing the documents “was the primary thing he wanted then and still wants now,” Finnegan said.

But Susan Gaertner, an attorney for the Duluth diocese, said the bankruptcy filing will not interfere with the diocese’s efforts “to be transparent and foster healing.”