Baltimore Archdiocese Bankruptcy Filing Heads Off Clergy Abuse Lawsuits Under Maryland Child Victims Act

The bankruptcy filing indicates church operations will proceed as normal as the Archdiocese reorganizes over a two to three-year period.

The Archdiocese of Baltimore declared bankruptcy late last week, just days before a new law was set to go into effect, which opens the door for Maryland clergy abuse lawsuits to be filed against the organization, regardless of how long ago the assault occurred. However, now those survivors will have to pursue their claims through the bankruptcy system.

In a letter to church parishioners issued on September 29, William E. Lori, the Archbishop of Baltimore, announced the archdiocese bankruptcy filing (PDF), which was brought in the U.S. Bankruptcy Court for the District of Maryland.

The move will prevent individuals from filing lawsuits against the Baltimore Archdiocese under the Maryland Child Victims Act of 2023, which went into effect on October 1. Instead, all claims will need to be brought through the bankruptcy proceedings, which the letter indicates will allow the Baltimore Archdiocese to reorganize over the next two to three years.

Liability from Maryland Clergy Abuse Lawsuits Cited in Bankruptcy Filing

In the letter, Archbishop Lori cited the new Maryland law as the driving factor in the decision for the Archdiocese of Baltimore to file for bankruptcy.

“[A]s a result of a new law that takes effect October 1st, the Archdiocese of Baltimore faces a great number of lawsuits of historic cases of child sexual abuse that were previously barred by Maryland law,” according to the letter. “After consulting with numerous lay leaders and the clergy of the Archdiocese, I have made the decision I believe will bests allow the Archdioces both to equitably compensate victim-survivors of child sexual abuse and ensure the local Church can continue its mission and ministries. Thus, the Archdiocese of Baltimore has filed for Chapter 11 reorganization.”

The Maryland Child Victims Act of 2023 allows survivors of sexual abuse as children to pursue legal claims against their abusers and any institutions that enabled the conduct, regardless of how long ago the assault occurred.

While variations of the new law have been working through the state’s legislature for years, it was finalized in April, just days after a long-awaited Baltimore Archdiocese child sex abuse report was released by the Maryland Attorney General.

The report detailed information about Catholic priests that abused children in Maryland over the last 60 years, including the names of 146 priests, deacons, seminarians and others who have been credibly accused by more than 300 victims and witnesses that came forward during the investigation.

“Generally speaking, shortly after today’s filing, the bankruptcy court will begin to accept claims from victim-survivors for a specified period of time. The Archdiocese and victim-survivors will then enter negotiations with the hope of agreeing to a plan that includes a trust fund to provide compensation,” Lori wrote. “If a plan is approved by the bankruptcy court, no future claims for past cases of abuse can be brought against the Church.”

The Maryland Catholic Church has previously threatened to challenge the constitutionality of the new law. However, if the challenges are unsuccessful, the Baltimore Archdiocese was likely to face thousands of lawsuits over prior decisions to protect priests who were known predators, and allow them to have continued access to vulnerable young children.

The Baltimore Archdiocese bankruptcy filing indicates the organization’s assets are valued between $100 million and $500 million. However, the church estimates it faces between $500 million to $1 billion in liabilities.

The organization issued a list of frequently asked questions regarding the bankruptcy filing to detail to church members how they could expect to be affected by the bankruptcy filing. The FAQ indicates operations will not be immediately affected, and retiree benefits and employees will still be paid.

Normal church operations should not be directly affected by the filing, church officials indicated.

Maryland Child Victims Act of 2023

For years, lawmakers attempted to change the Maryland child sex abuse statute of limitations, which currently prevents most survivors from pursuing lawsuits.

Supporters of the legislation argued that removing the Maryland statute of limitations on child sex abuse claims was necessary, since many survivors are not prepared to address the conduct until much later in life. In addition, the Catholic Church has been notorious for covering up credible allegations, discrediting child survivors of abuse and pressuring devoted families from pursuing any action against priests or other members of the clergy.

After a two year window in the New York child sex abuse statute of limitations was opened in 2020, tens of thousands of claims were brought against the Boy Scouts, Catholic Church and other entitles throughout the state. The Buffalo Diocese alone had at least 230 Catholic priests accused of sexually abusing minors, with eight specific priests accounting for more than 1,000 lawsuits filed in that part of the state.

While statute of limitations laws have also been enacted in a number of other states, including New Jersey, California and Louisiana, other states are still debating similar bills that would allow survivors to hold abusers and entities that enabled their conduct accountable.

The Maryland Child Victims Act includes a provision that an interlocutory appeal may be immediately pursued following any order denying a motion to dismiss based on a defense that the Maryland statute of limitations or statute of repose bars the claim, or that the legislative action reviving the claim is unconstitutional.

An interlocutory appeal allows the higher courts to consider the case before any final judgment is rendered in the trial court. While this measure will introduce substantial delays before survivors of sexual abuse are able to obtain justice, it will also avoid the need for each individual to recount their trauma at trial before the Maryland Supreme Court evaluates the constitutionality of the new law.