Another U.S. diocese considers bankruptcy; Catholic Church Bankruptcy News publishes first issue


An attorney for the Diocese of Covington announced Wednesday that the diocese is considering filing for bankruptcy in order to remain financially solvent.

The Covington Diocese has already paid out $14 million to settle claims of sexual abuse. But it is currently facing a class-action lawsuit, alleging a widespread cover-up of abuse by diocesan officials, which could cost it tens of millions of dollars. The plaintiffs' attorneys claim to have hundreds of victims, involving more than 50 priests over the past half century.

Earlier this week, the Archdiocese of Portland, Ore., filed for bankruptcy for the same reason.

"There is a popular myth that Catholic dioceses have unlimited funds and an unlimited ability to generate contributions from the faithful,” said attorney Carrie Huff of Chicago, who is defending the Covington Diocese in the lawsuit. “Portland, and probably several other dioceses, are about to demonstrate that this assumption is at odds with reality."

The Diocese of Tucson is also considering filing for bankruptcy.

Given these announcements, Bankruptcy Creditors' Service, Inc., has created a per pay newsletter, Catholic Church Bankruptcy News, tracking this week's Chapter 11 filing by the Archdiocese of Portland in Oregon and any other archdioceses that may follow.

Frauline S. Abangan, one of the newsletter's editors says that "while the Roman Catholic Church isn't a traditional business, the same principles apply in this restructuring as any other." 

"The value of the enterprise needs to be determined, creditors need to be lined up in order of their statutory priority and the value of the enterprise will be distributed to those creditors,” she said.

A free copy of the first issue of the newsletter is available at

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