Catholic Church in Delaware Files for Bankruptcy Protection on Eve of Sexual-Abuse Trial

The Roman Catholic Diocese of Wilmington appears to have learned a few secular lessons from corporate felons in that state. On the eve of the first trial of dozens of sex-abuse cases with hundreds of millions in potential damages, the diocese filed for bankruptcy to try to make any damages more difficult to collect. The decision by Bishop W. Francis Malooly is being attacked as an effort to reduce potential damages in the various cases moving toward trial.

The diocese is facing the cases due to a two-year moratorium on the statute of limitations passed by the legislature in 2007 — resulting in 142 alleged victims filing lawsuits. The church has now responded by filing for Chapter 11 protection. Bishop W. Francis Malooly called bankruptcy a “painful decision” but insisted that it will not only protect the church but allow payment to victims.

Lawyers for the victims, however, denounced the move as a “fraudulent tactic” designed to hide assets and accountability.

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