Iowa Catholic Diocese Files for Bankruptcy After Sex-Abuse Claims

After paying out more than $10.5 million to resolve dozens of sex abuse claims and now facing a new set of lawsuits, the Roman Catholic Diocese of Davenport, Iowa, has filed for Chapter 11 bankruptcy.

The move Tuesday makes the diocese — with more than 105,000 parishioners — the fourth in the nation to seek financial protection to deal with priest sex abuse cases.

Bishop William Franklin said the diocese was left with no other alternative and the move would ensure the financial health of the church.

"The decision to reorganize is the best way in which we will be able to continue the Church's mission," Franklin wrote in a letter to members posted on the diocese Web site.

Since 2004, the diocese has paid more than $10.5 million to resolve dozens of claims filed against priests, including a $9 million settlement reached with 37 victims in fall 2004. Since then, the diocese or former priests under its supervision have been held liable by juries in civil trials.

But the decision to file for bankruptcy now is being driven by a new set of claims aimed at the diocese and retired Bishop Lawrence Soens, church officials and others say.

Soens, who served as Bishop in Sioux City in northwest Iowa, has been accused of misconduct by as many as 15 former students during his tenure as priest and principal at a Catholic high school in Iowa City during the 1960s.

Soens, who retired in 1998, denies the allegations.

Diocese Spokesman Deacon David Montgomery said the diocese is aware of 25 pending sexual abuse claims against former priests, but others may be forthcoming.

The first of three trials involving Soens and the diocese was scheduled to begin Oct. 23, but a victims' lawyer said it likely will be dismissed in light of the bankruptcy filing.

"I think it's a sad day for victims of clergy abuse in the Davenport Diocese as well as its parishioners," said the lawyer, Craig Levien. "I believe it's just an unnecessary step ... with the real purpose being an effort to try and eliminate future responsibility."

The Davenport diocese now joins Portland, Ore., Spokane, Wash., and Tucson, Ariz., seeking Chapter 11 bankruptcy protection, in which a court supervises the reorganization of the diocese's contractual and debt obligations.

The costs of the Catholic abuse crisis nationwide have risen to about $1.5 billion since 1950, according to studies released by the U.S. Conference of Catholic Bishops.