Spokane Diocese Files for Bankruptcy

Published January 14, 2015

The Roman Catholic Diocese of Spokane (search), unable to settle sexual abuse lawsuits, will file for bankruptcy at the end of the month, the bishop said Wednesday.

In a recent letter to parishioners, Bishop William Skylstad (search) said the total amount of sex abuse claims "is in the tens of millions of dollars and far exceeds the net worth of the diocese."

Spokane is one of three Catholic dioceses forced into bankruptcy stemming from an abuse scandal that rocked the church in 2002.

The Archdiocese of Portland, Ore., and the Diocese of Tucson, Ariz., have already filed for bankruptcy protection. The Portland diocese filed in July, the same week a lawsuit was scheduled for trial. The Tucson diocese filed in September, saying it needed court protection because of legal costs from the cases.

The Chapter 11 (search) bankruptcy protection in Spokane will allow the diocese to continue functioning while protecting people who were sexually abused by priests in the past, Skylstad said. "Valid claims will be settled," he said.

Skylstad, who is scheduled to assume the presidency of the U.S. Conference of Catholic Bishops on Monday, said filing for bankruptcy will suspend litigation and its costs on several sexual abuse lawsuits against the diocese.

Advocates for abuse victims immediately denounced the diocese's announcement.

"Without a shred of proof, Bishop Skylstad is asking us to believe he's struggling financially and must stop the truth from being told and the victims from healing by seeking bankruptcy protection," said Michael Ross, a local leader of Survivors Network of those Abused by Priests.

A lawsuit alleging that the Spokane diocese did not do enough to protect children from a former priest, Patrick O'Donnell, is scheduled for trial Nov. 29.

O'Donnell, 62, was removed from ministry in 1986. He admitted to sexually abusing boys from the time he was in seminary.

Last week, the diocese announced that talks to settle 28 sexual abuse claims had failed. The talks involved five lawsuits involving O'Donnell. Skylstad has said insurance companies were not willing to pay the demands of alleged victims.

Bankruptcy would not close down parishes and schools. Skylstad has said one of the goals of a Chapter 11 filing would be to protect the assets of the more than 80 parishes in the diocese, which covers the eastern third of the state.

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