New Jersey diocese declares bankruptcy

CNA 50ec6ed2dd772 16517 1 Bishop Dennis J. Sullivan. / Diocese of Camden.

The Diocese of Camden, New Jersey, announced on Thursday that it is filing for bankruptcy, the second Catholic diocese to do so on that same day.

"I take some comfort that we are not alone in making this decision, as we have seen that well-known public entities and other Catholic dioceses across the country have been forced recently to do likewise," said Bishop Dennis Sullivan of Camden on Thursday afternoon.

The bishop said that a triple blow of new abuse lawsuits, a drop in donations due to the pandemic, and $8 million in payouts through the New Jersey Independent Victims Compensation Program were behind the bankruptcy declaration. Sullivan said the diocese had to borrow money to make the payouts through the program.

"If it were just the pandemic, or just the costs of the Victims Compensation Program, we could likely weather the financial impact; however, the combination of these factors has made that impracticable," Bishop Sullivan said.

Hours earlier, the Diocese of Rockville Centre on Long Island, New York declared that it was filing for Chapter 11 reorganization amid more than 200 new clergy sex abuse lawsuits, a drop in donations because of the pandemic, and previous payouts to abuse survivors.

New laws in New York and New Jersey have created a time window for sex abuse lawsuits to be filed long after the statute of limitations had expired.

In May of 2019, Gov. Phil Murphy signed into law an extension of the statute of limitations in child sex abuse cases, allowing survivors to file lawsuits until they reached the age of 55 or seven years after they became aware of the injury, whichever came later. It resulted in new lawsuits naming the Catholic dioceses in the state, with more than 50 lawsuits involving the Camden diocese.

"This year has seen historic difficulties in South Jersey, in our country and across the world due to the effects of the COVID-19 pandemic to which our diocese has not been immune," Sullivan said.

Other Catholic dioceses have declared bankruptcy in recent years amid new state laws extending the statute of limitations in child sex abuse cases. Four dioceses in Minnesota have declared bankruptcy, and four in New York as well.

Sullivan said on Thursday that the Camden diocese would work with the bankruptcy court to continue its ministries and services through the process, and that the declaration "will have no direct effect on our schools, parishes or pension plans."

In June, the Vatican reminded U.S. dioceses in a letter that certain bankruptcy declarations require Rome's permission, in cases where "the alienation of temporal goods" of a diocese exceeds a threshold established by the U.S. bishops' conference in 2011. That limit is $7.5 million for dioceses with more than 500,000 Catholics, and $3.5 million for smaller dioceses.

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