Milwaukee archdiocese declares bankruptcy and blames priest sexual predators

Milwaukee Archbishop Jerome E. Listecki

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Today, the archdiocese declared Chapter 11 bankruptcy, and flatly laid the blame for its predicament where it belongs: "This action is occurring because priest-perpetrators sexually abused minors."

In one case, a diocese priest sexually abused about 200 boys at a suburban school for deaf students for 24 years, starting in 1950.

The diocese has also created an entire section on its website devoted to dealing with the bankruptcy and its cause. The filing was the only way the archdiocese felt it could fairly address the unresolved claims of sex abuse victims, while at the same time keeping the doors open on ministries, service, parishes, schools, and charities.

In recent years, according to the site, the archdiocese has paid out more than $12 million in settlement costs, sold off some property and mortgaged others, liquidated savings and investments, and eliminated some programs and services. You can read an overview of its financial status here.

"In my installation homily on January 4, 2010, I spoke of the devastation of sin and its effect on us personally and as a community," Archbishop Jerome E. Listecki said in a statement. "We see the result of that sin today. This action is occurring because priest-perpetrators sexually abused minors, going against everything the church and the priesthood represents."

The archdiocese, founded in 1843, covers almost 5,000 square miles in Wisconsin. It has 210 parishes for 643,000 registered Catholics.

Read the full message from the archbishop:

Today, January 4, 2011, after consultation with archdiocesan advisors, Archbishop Jerome E. Listecki directed attorneys for the Archdiocese of Milwaukee to file a petition for a Chapter 11 reorganization of its financial affairs under the U.S. Bankruptcy Code.

This action is occurring because priest-perpetrators sexually abused minors.

Financial claims pending against the archdiocese's means, recent failure to reach a mediated resolution with victims/survivors involved in lawsuits against the archdiocese, along with the November court decision that insurance companies are not bound to contribute to any financial settlement, made it clear that reorganization is the best way to fairly and equitably fulfill obligations.

In taking this action, there are two goals. First, the archdiocese wants to fairly compensate victims/survivors with unresolved claims - both those with claims pending and those who will come forward because of this proceeding. Second, the archdiocese wants to carry on the essential ministries of the archdiocese in order to continue to meet the needs of parishes, parishioners and others who rely upon the Church for assistance.

A Chapter 11 reorganization is the best way to achieve these goals. It enables the archdiocese to use available funds to compensate all victims/survivors with unresolved claims in a single process overseen by a court, ensuring that all are treated equitably. In addition, by serving as a final call for legal claims against the archdiocese, the proceeding will allow the Church to move forward on stable financial ground, focused on its Gospel mission.

For more information on this topic, please view the resources available on this page.

If you have questions or concerns, please contact us at reorg@archmil.org.

Seven other Catholic dioceses in the U.S. have filed for bankruptcy protection since 2002.: Davenport, Iowa; Fairbanks, Alaska; Portland, Oregon; San Diego; Spokane, Washington; Tucson, Arizona; and Wilmington, Delaware.