Minnesota Diocese Files for Bankruptcy After Sex Abuse Award

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."

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."

"We have been consistently seeking through negotiation, through mediation, a resolution not just of the Doe 30 case, but all the cases," Gaertner said. "And that will continue. But now it will continue in bankruptcy court."

She said the diocese faces six lawsuits, including Weis', as well as 12 additional notices of claims. Attorneys said Weis' lawsuit was the first lawsuit to go to trial under Minnesota's Child Victims Act, passed in 2013, that opened a three-year window to file claims for older incidents of abuse. That window closes in May 2016.

In a telephone interview Monday, Bissonette noted that most of the cases come from the 1950s, '60s and '70s. Since 1992, the diocese has had procedures in place to make sure its parishes are "the safest place possible for minors and for young adults," he said.

The Duluth diocese is the second in Minnesota to file for bankruptcy protection this year because of sex abuse claims. The Archdiocese of St. Paul and Minneapolis filed for bankruptcy protection in January.