Catholic diocese of Duluth on Monday filed for bankruptcy protection following a jury’s decision ordering the diocese and a Catholic religious order to pay more than $8 million in damages to a man who was sexually abused by a priest in 1978.
In a February 2014 lawsuit, Fitzgerald was accused of sexually abusing a 13-year-old boy who is now 52 years in 1978. He had met the boy while at a pastoral education program at a parish in the New Ulm diocese, and invited him to serve as an altar boy for two weeks at his Squaw Lake MN parish and reportedly sexually assaulted him during those two weeks. The lawsuit also claimed priest also sexually assaulted another child during his time in Squaw Lake, on the Leech Lake Indian Reservation near Bemidji MN. Jurors who deliberated the trial last month said the diocese failed to supervise the priest and said that it should have known he was dangerous. The Jury awarded the plaintiff in this case $8.1 million.
The accused priest Rev. James Vincent Fitzgerald,now deceased was a priest of the Oblates of Mary Immaculate ordained in 1950.
Diocesan Vicar General James Bissonette released a statement on behalf of the diocese saying that filing for bankruptcy was the only way out given the magnitude of the verdict and uncertainty over the number of lawsuits the diocese will face.
“Because of the size of the award and our limited resources, when we looked at it we needed to do this today in order to assure some measure of justice for all the victims and to make sure that the day-to-day operations of the diocese continue,” Bissonette said
“There is sadness in having to proceed in this fashion. After the recent trial, the Diocese again attempted to reach a mutually-agreeable resolution. Up to this point, the Diocese has not been able to reach such a settlement, and given the magnitude of the verdict, the Diocese was left with no choice but to file for reorganization. The decision to file today safeguards the limited assets of the Diocese and will ensure that the resources of the Diocese can be shared justly with all victims, while allowing the day-to-day operation of the work of the Church
This decision is in keeping with our approach since the enactment of the Child Victims Act, which has been to put abuse victims first, to pursue the truth with transparency and to do the right thing in the right way”.
The diocese’s last fiscal year operating budget was less than $3.3 million. That was insufficient even if insurance and savings were used to cover the judgment, and would leave no resources for other victims who have brought claims, the diocese said.The bankruptcy filing “safeguards the limited assets of the diocese and will ensure that the resources of the diocese can be shared justly with all (clergy abuse) victims” while letting the diocese continue its daily work, he added.
The diocese, which includes more than 56,000 Catholics and 92 parishes in ten northeastern Minnesota counties, says its budget last year totaled only $3.3 million.
The diocese confessed to having credible accusations of sex abuse against 31 priests who had worked for the diocese.
Insurance coverage and available savings are “insufficient for such a large judgment and no resources would be available for the remaining abuse victims who have brought claims,” the diocese said.
The diocese also admitted paying $780,000 in previous settlements. Much of that amount was covered by insurers. Worse, the diocese could face 18 lawsuits by victims of alleged sexual assault.
Mike Finnegan, an attorney who represents abuse victims said that abuse victims can still get help and compensation, although that might take years of court action.
Abuse victims and their attorneys expressed their annoyance over the diocese bankruptcy filing.
“They’re running off to bankruptcy court to keep a lid on their secrets, basically,” said David Clohessy, director of SNAP, the Survivors Network of those Abused by Priests.
He said that by filing for bankruptcy the diocese can conceal misdeeds that could be revealed if abuse were to go to trial.