Catholic Diocese in Iowa Exits Bankruptcy After Sex Abuse Scandal

June 26, 2012

By: John Clark

The Catholic Diocese of Davenport, Iowa, has closed the book on its bankruptcy case after meeting the terms of its reorganization plan by paying $37 million to victims of sexual abuse by priests, according to a report from CBS News.

Sources say that the diocese originally decided to file for bankruptcy in 2006, when it claimed that it did not have enough financial resources to adequately compensate the numerous victims of sexual abuse who had reported incidents that occurred during the past few decades.

And the Diocese of Davenport was not alone, as several Catholic dioceses across the country filed for bankruptcy around the same time as the sexual abuse scandal rocked the ancient church.

After its own bankruptcy filing, the Diocese of Davenport agreed to a bankruptcy reorganization plan in which it would pay $17.5 million to more than 162 victims of sexual abuse, while its insurer would contribute $19.5 million to those same victims.

The settlement also gained some national attention for displaying a detailed list of abuse claims. The chilling list includes more than 30 cases and extends back almost 60 years.

In addition to its financial obligations, the bankruptcy court also made the church investigate further sexual abuse claims, apologize to the victims, and take active measures to prevent abuse in the future.

Pleased with the diocese’s progress on every count, U.S. Bankruptcy Judge Lee Jackwig closed the bankruptcy case this week, closing a sordid chapter in the history of the Iowa church.

The major players for the diocese who were involved in the bankruptcy were, of course, pleased by the judge’s decision.

In a recent statement, Bishop Martin Amos says that victims of abuse were able to find “just and fair compensation” through the bankruptcy process, although he acknowledged that the money “will not end the suffering by some survivors of abuse.”

The bishop also told reporters that the church plans to implement mandatory abuse-prevention training for all its employees, and to increase the scrutiny of its background checks for all employees and volunteers.

One lawyer, however, does not believe the church has gone far enough to compensate the victims for their traumatic experiences.

Craig Levien, an attorney based in Davenport, Iowa, said that bankruptcy was only a “legal maneuver” by the diocese and does not fully absolve the church of its sins.