Chapter 11
Bankruptcy
Letter to the Faithful from Archbishop Salvatore J. Cordileone on the Archdiocese of San Francisco’s filing for Chapter 11 Bankruptcy to facilitate settlements with abuse survivors
August 21, 2023
Dear Faithful of the Archdiocese of San Francisco:
A few weeks ago, I wrote to you about the impact of more than 500 civil lawsuits that have been filed against the Archdiocese under state law AB-218, which allowed individuals to bring claims for childhood sexual abuse that otherwise would have been barred due to the expiration of the statute of limitations.
Today, I am informing you that after much reflection, prayer, and consultation with our financial and legal advisors, the Archdiocese of San Francisco filed for Chapter 11 bankruptcy reorganization.
We believe the bankruptcy process is the best way to provide a compassionate and equitable solution for survivors of abuse while ensuring that we continue the vital ministries to the faithful and to the communities that rely on our services and charity.
The Archdiocese of San Francisco joins a growing list of dioceses in the United States and California that have filed for protection under the bankruptcy laws. Some of these dioceses have already restructured and emerged from this process.
To be clear, only the legal entity, The Roman Catholic Archbishop of San Francisco, a Corporation Sole, is included in the Chapter 11 filing. Our parishes, schools, and other entities are not included in the filing. Our mission will continue as it always has. Parishes will serve the spiritual needs of the faithful, celebrating Mass, offering the Sacraments, and providing religious education. Schools will provide the best Catholic education for students, and our Chancery will continue to support parishes and schools, and its ministries will remain engaged in the community. Catholic Charities, Catholic cemeteries, and St. Patrick’s Seminary & University will continue their operations as usual. Chancery employees will work and receive their wages and benefits during this process and beyond.
I also want to reassure you that any contributions made to the parish offertory or to the Archdiocesan Annual Appeal will not be used to settle abuse claims. According to a very long-standing legal and moral principle, the intention of the donor must always be respected, and these funds, which you so generously donate, are collected for use by the stated ministries, which exclude legal settlements or related expenses. Without your continued support, the Archdiocese could not provide its critical services to those most in need. I am grateful for your generous gifts of time, talent, and financial resources.
It is important to know that the overwhelming majority of the alleged abuse occurred in the 1960s and 70s, and into the 80s, and involved priests who are deceased or no longer in ministry. A significant number of these claims include unnamed individuals or named individuals who are unknown to the Archdiocese.
To safeguard against abuse, our Archdiocese has maintained and improved awareness and education for children and adults. We use stringent processes to screen volunteers, employees, and priests. Today, while this continues to be a widespread societal problem, occurrences of abuse within the Catholic Church are very rare, and I believe the Church has set the standard for other organizations, showing what can and should be done to protect our children.
I remain committed to the healing and care of survivors who have suffered irreversible harm because of the sins of the Church’s ministers and ask you to join me in praying for our Archdiocese, parish communities, schools, and all survivors of sexual abuse.
Now more than ever, we need to take recourse to prayer. I invite you to commit yourselves, or recommit, to living the consecration of our Archdiocese to the Immaculate Heart of Mary, which I celebrated on October 7, 2017.
While the great majority of these sins were committed many decades ago, it will be a sign of Christian solidarity for us to join together on a daily basis in praying the rosary, spending an hour each week in adoration before the Blessed Sacrament, and fasting on Fridays for the survivors of abuse, for the mission of our Archdiocese, and for the eradication of this shameful crime from our society as a whole. God is pleased by such prayer and penance, and doing so will open our hearts to the blessings He wishes to lavish upon us.
May God shower you and your families with His grace during these difficult times.
Sincerely yours in our Lord,
Most Rev. Salvatore J. Cordileone
Archbishop of San Francisco
Questions and Answers in response to lawsuits filed against the Archdiocese under AB-218
After consulting with its financial and legal advisors over the past several months, the Archdiocese determined that a Chapter 11 bankruptcy reorganization is the best option for managing and resolving these cases. It will allow the Archdiocese to achieve two very important goals.
First, the Chapter 11 process brings all parties together to resolve difficult claims fairly and equitably under the supervision of the bankruptcy court. Cases will be dealt with collectively rather than one at a time. This will result in a faster resolution for survivors, providing them with fair compensation and closure. It eliminates a scenario where the first few cases that are resolved expend all available resources to pay claims, leaving nothing for survivors whose cases are resolved later.
Secondly, Chapter 11 allows the Archdiocese to reorganize its financial affairs to continue its vital ministries to the faithful and to the communities that rely on its services and charity.
Only The Roman Catholic Archbishop of San Francisco, a Corporation Sole, is included in the filing. The assets of parishes, schools, and other associated ministries are not included. The operations of parishes and schools will continue as usual without disruption, as will the activities of the Archdiocese. Other ministries, such as St. Patrick’s Seminary & University, Catholic Charities, and our cemeteries will also continue their operations without disruption.
No, the Chapter 11 filing should not have any direct effect on jobs in the Archdiocese. Employees of companies and non-profit organizations that file to restructure under Chapter 11 of the Bankruptcy Code continue to work and receive their wages and benefits during the process and beyond. As is the case in the past, employment decisions will continue to be based on needs, performance, and overall goals of archdiocesan ministries.
Chapter 11 is a legal mechanism for court-supervised reorganization or restructuring of an organization’s obligations. Chapter 11 provides a way for an organization to address its financial condition in order to remain a viable entity, while continuing day-to-day operations.
No. All financial gifts made to the Archdiocese, whether to your parish or the Archdiocesan Annual Appeal (AAA), are held in trust and can only be used for their intended purpose. According to a very long-standing legal and moral principle, the intention of the donor must always be respected. The parish offertory is to be used for the benefit of the parish, and the AAA is to be used for its specific ministries, which exclude legal settlements and related expenses. Without your continued support, the Archdiocese could not provide its critical services to those most in need. We are grateful for your generous gifts of time, talent, and financial resources.
Given the seriousness and complexity of the situation, it is unclear how long the process will take. Other dioceses that have gone through this process have taken between one and three years. The Archdiocese will work to emerge from Chapter 11 as quickly as possible.
No. We believe Chapter 11 is the most viable option for compensating survivors fairly and equitably. Otherwise, parties who filed first and were able to resolve their litigation could have an unfair advantage over claimants who have their cases heard later.
Chapter 11 allows all claimants equal access and an equitable share in the assets available to pay claims. It is a court-supervised, transparent process that allows for the evaluation of the merits of each claim and gives claimants a say in the outcome and visibility into the proceedings and Archdiocesan finances. This action will allow the Archdiocese to address these matters in a comprehensive manner, move forward with its essential services and mission, and provide survivors with a faster, more equitable resolution.
While we don’t know how much money will be needed as part of the Chapter 11 process, we believe we should be able to reach a fair and equitable outcome for all survivors and provide just compensation to the innocent people who were harmed, while allowing the Archdiocese to reorganize its financial affairs to continue its vital ministries to the faithful and to the communities that rely on our services and charity.
Yes. More than two dozen U.S. dioceses have filed for Chapter 11, including most recently the Diocese of Oakland in California and the Diocese of Ogdensburg in New York. For those 18 or so dioceses that have resolved their bankruptcies, all have been able to successfully emerge and continue their ministries and support their communities.
Of the 12 dioceses or archdioceses in California, there are three dioceses currently in the Chapter 11 process, including the Archdiocese of San Francisco. The Roman Catholic Bishop of Santa Rosa filed its case on March 13, 2023, and on May 8, 2023, The Roman Catholic Bishop of Oakland filed its chapter 11 case. The Diocese of Stockton filed on January 15, 2014, and completed its process in February 2017.
Our Chapter 11 filing does not include the schools and parishes and therefore does not have an impact on operational decisions for schools and parishes. Those decisions would continue to be made based on sound mission and business judgements.
A Chapter 11 filing triggers a “stay” that essentially freezes all litigation against the Archdiocese. We will work with all survivors through the Chapter 11 process to finalize a fair and equitable settlement. The claims and settlement will be part of the Archdiocese’s Plan of Reorganization and must be approved by the Court before the Archdiocese can emerge from bankruptcy.
We believe the bankruptcy process is the best way to provide a compassionate and equitable solution for survivors of abuse while ensuring that we continue the vital ministries to the faithful and to the communities that rely on our services and charity.
Through AB-218, the State of California for a second time removed the statute of limitations on sexual abuse claims for non-profit organizations, opening a new three-year window allowing cases to be filed against the Archdiocese through December 31, 2022. This resulted in more than 500 civil lawsuits being filed against the Archdiocese. It is important to know that the overwhelming majority of the alleged abuse occurred in the 1960s and 70s, and into the 80s, and involved priests who are deceased or no longer in ministry. A significant number of these claims include unnamed individuals or named individuals who are unknown to the Archdiocese.
Absolutely not. Chapter 11 is a very transparent process with information available to anyone. All of the court filings are available online at https://omniagentsolutions.com/RCASF free of charge.