Baltimore Archdiocese Files for Bankruptcy

The archdiocese of Baltimore, the oldest in the United States, filed for Chapter 11 bankruptcy on Friday, two days before a new state law goes into effect that will allow child sexual abuse victims to sue organizations no matter how long ago the abuse took place.

Archbishop William E. Lori attributed the filing directly to the law’s effect on the archdiocese, which is facing “a great number of lawsuits” that were previously prohibited by state law, he said in a letter to the archdiocese on Friday.

Filing for bankruptcy, Archbishop Lori said in the letter, is “the best path forward to compensate equitably all victim-survivors, given the archdiocese’s limited financial resources, which would have otherwise been exhausted on litigation.”

The bankruptcy filing stops all lawsuits against the archdiocese, which could have been filed starting at 12:01 a.m. on Sunday. Instead, a judge will oversee the reorganization of the archdiocese, ultimately setting a deadline for victims to file their claims in bankruptcy court.

The state’s Child Victims Act was signed by Gov. Wes Moore in April. Maryland’s Catholic Conference, the lobbying arm for the church, opposed the bill when it was being debated, calling it unconstitutional and unfair.

The bill’s final passage was timed to the release of a major report from the Maryland attorney general that revealed how clergy members from across the archdiocese had abused hundreds of children and teenagers over six decades.

The report documented “pervasive and persistent abuse” by clergy members and others in the archdiocese, and a church hierarchy that systematically failed to investigate and restrict abusers’ access to children.

The new law eliminates the statute of limitations for future child sex abuse lawsuits, setting it apart from other states that have opened limited “lookback windows” for victims to sue over past abuse.

But the bankruptcy filing means that victims will now have to file their claims by a certain date, effectively limiting future lawsuits.

The archdiocese has also argued that the law could result in extremely large settlements or jury awards for the first handful of victims, draining the institution’s resources and preventing others from receiving fair compensation. With the Chapter 11 filing, payouts to creditors — including victims suing for financial compensation — would instead be managed by a bankruptcy judge.

But critics say that the archdiocese’s objection doesn’t hold water, since the state law caps rewards for noneconomic losses in each case at $1.5 million, a relatively low amount that would not drain resources immediately.

“Their argument is disingenuous and it’s an effort to avoid accountability,” said Philip Federico, a lawyer based in Baltimore who represents victims of child sexual abuse.

Baltimore has symbolic stature in the American Catholic Church because of its history and large Catholic population. For the country’s first few decades, the entire American Catholic Church formally existed within the diocese. Its current leader, Archbishop Lori, was elected last year as vice president of the United States Conference of Catholic Bishops.