Davenport may be third U.S. diocese to file for bankruptcy protection in recent months

Dresden, Germany, Oct 21, 2004 / 22:00 pm

The Diocese of Davenport may file for bankruptcy protection today if it does not win a four-month delay in a child sexual-abuse lawsuit, set to begin Nov. 1.

If the diocese files for Chapter 11 bankruptcy, the claims of more than three dozen men will be frozen, reported the Des Moines Register Oct. 19.

Judge C.H. Pelton held a hearing Wednesday on postponing the trial.

Davenport would be the third Catholic diocese to file for Chapter 11 bankruptcy in recent months. Once the bankruptcy process is under way, diocesan records will be exposed court and public scrutiny, and victims' claims will be considered with the diocese's other debts. The bankruptcy judge may hear the abuse cases, or he can return the lawsuits to state court for trial.

Craig Levien, attorney for 37 of the 38 men alleging priests sexually abused them when they were children, said he believes the diocese wants the bankruptcy court to set a deadline for filing claims.

So far, the diocese has settled three cases of child sexual abuse, paid entirely in the 1990s by the diocese's insurer.The diocese has tried to identify insurance coverage that will pay other settlements.

Diocese officials have been able to confirm coverage since 1969, but more than half the lawsuits and mediation claims allege abuse before that, diocese spokesman David Montgomery said.

Bishop William Franklin said the diocese was contemplating major downsizing, including dismissing many of its "dedicated staff" and the sale of the St. Vincent's Center.

The exact positions to be eliminated have not been determined.