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Duluth bankruptcy allows diocese to assist victims, 'protect Church's mission'

  • December 9, 2015

DULUTH, Minn. - The Diocese of Duluth said Dec. 7 it has filed for Chapter 11 bankruptcy protection because efforts to reach a settlement "that would assist all abuse victims and protect the Church's mission" have been unsuccessful.

In November, a Ramsey County jury in St. Paul awarded $8.1 million to a 52-year-old man, known only as "Doe 30," who said that in the 1970s, when he was 13, he was abused by the late Fr. James Vincent Fitzpatrick. An Oblate of Mary Immaculate, the priest was serving a parish assignment in the Duluth diocese at the time.

The jury found the diocese negligent in its supervision of the priest and ordered the diocese to pay $4.9 million, or 60 per cent, of the amount it awarded to the abuse victim.

"There is sadness in having to proceed in this fashion," Fr. James Bissonette, vicar general, said in a statement about the diocese's decision to file bankruptcy.

"After the recent trial, the diocese again attempted to reach a mutually agreeable resolution. Up to this point, the diocese has not been able to reach such a settlement, and given the magnitude of the verdict, the diocese was left with no choice but to file for reorganization," he said.

According to the diocese, its operating budget for the last fiscal year was about $3.3 million. Even with insurance coverage and some diocesan savings available, it said, it has insufficient funds to cover the judgment and also provide resources for others who have brought abuse claims.

The bankruptcy filing "safeguards the limited assets of the diocese and will ensure that the resources of the diocese can be shared justly with all victims, while allowing the day-to-day operation of the work of the Church to continue," Bissonette said.

He added: "This decision is in keeping with our approach since the enactment of the Child Victims Act," he added, "which has been to put abuse victims first, to pursue the truth with transparency and to do the right thing in the right way."

Minnesota's Child Victims Act, passed in 2013, lifted the statute of limitations for child abuse cases, opening a three-year window for people to sue the Catholic Church over incidents dating back decades. The deadline for filing a lawsuit on older cases is May 2016.

"Doe 30" filed suit in early 2014 in Ramsey County District Court against Fitzpatrick's religious order, the Diocese of New Ulm, where Fitzpatrick also had worked in parish ministry, and the Diocese of Duluth.

The Oblates of Mary Immaculate had settled with the victim and a court dismissed the suit against Diocese of New Ulm.

The Survivors Network of Those Abused by Priests, known as SNAP, criticized the diocese's decision to file for bankruptcy.

"Bishops declare bankruptcy for selfish reasons, not financial ones. They want to keep their reputations, not their assets," the group said in a statement. "Bankruptcy brings an abrupt halt to disclosures about which clerics committed and concealed child sex crimes. That's a self-serving strategy for a prelate. It's a hurtful strategy for parents, police, prosecutors, parishioners, the public and of course victims. It's morally wrong."

During the trial in St. Paul, attorney Jeff Anderson, who has represented hundreds of abuse victims in settlement proceedings across the country, argued the Diocese of Duluth should have known the priest presented a danger to children. The abuse occurred one summer when the mother of "Doe 30" allowed her son to spend the summer with Fitzgerald to help out as an altar boy in a rural parish.

The diocese's attorney, Susan Gaertner, told jurors no one disputed the boy had been abused. "It's awful, absolutely awful," she said in her opening arguments, but the issue was that the diocese "did not have one piece of information" the priest posed a risk to children.

On its web site, the diocese states that it has had safe environment policies in place since 1992.

"These policies involve mandatory reporting, co-operation with law enforcement, background checks and other safety precautions for diocesan personnel and safety training for children," it said, "and these policies are continually updated and improved."

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