Duluth Diocese Files for Bankruptcy after Facing $5M Abuse Judgment

by San Antonio Attorney

The Diocese of Duluth filed for bankruptcy protection last Monday after facing a $5 million verdict, six lawsuits and other claims that stemmed from child sexual abuse cases.

The bankruptcy filing occurred after a month of receiving the verdict of $8.1 million against the diocese and Catholic religious order in the first case to go on trial under the Minnesota Child Victims Act.

Due to the sizable verdict, the only option for the diocese is to resort to bankruptcy, according to Rev. James Bissonette.

The diocese was mandated to pay $4.9 million in damages from the recent trial and the organization’s annual budget is only about $3.3 million.

The diocese is the 15th in the nation to file for bankruptcy over sexual abuse claims.

Mike Finnegan, the legal representative under Jeff Anderson and Associates, the law firm representing the abuse victims, revealed that he is confident that his clients will see a fair resolution to their cases.

The bankruptcy filing, which contains nine pages, stated that the diocese maintains both assets and debts that range from $1 million to $10 million.

Five other cases are still pending against the diocese in State District Court under the Child Victims Act, a legislative action that temporarily allows victims to file a case.

Twelve additional claims have been filed with the diocese but these are not yet brought to court.

Finnegan’s firm represents about 30 victims of abuse that occurred within the Diocese of Duluth.

The deadline for filing lawsuits against the diocese is May 25.  However, claims may have to be filed earlier if a bankruptcy judge requires it.

Filing Chapter 11 bankruptcy is normally a measure taken by major entities with enormous debts.  It would allow them to restructure so that they can regain stability in their business and avoid liquidation.

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