Local
Oakland Diocese must revise bankruptcy proposal after judge rejects survivor-claims plan
A federal bankruptcy judge rejected the Oakland Diocese’s proposed resolution of nearly 350 sexual abuse claims, finding it failed to meet a required standard for dissenting creditors. The ruling sends the parties back to negotiations as survivors’ attorneys press for a fair and timely resolution.
A federal bankruptcy judge has rejected the Diocese of Oakland’s plan to resolve nearly 350 sexual abuse claims and move the institution out of Chapter 11, sending the diocese and survivors back to the negotiating table.
In a 109-page ruling, U.S. Bankruptcy Judge William Lafferty found that the diocese had not shown dissenting creditors would receive at least as much under its proposal as they would if the diocese’s assets were liquidated. He also questioned how the diocese valued its assets and said its religious status did not justify treating it differently in bankruptcy court.
Nearly every survivor with a pending claim opposed the plan, according to the ruling’s account. Survivors’ attorney Jeff Anderson welcomed the decision and called for renewed talks.
“Now, hopefully, we can work with the bishop to bring speedy justice to the suffering,” Anderson said. He accused the diocese and its bankruptcy lawyers of using “hardball tactics” during more than three years of proceedings, saying survivors sought truth and transparency through the creditors committee.
Lafferty urged both sides to continue discussions in “relentless good faith.” The decision does not resolve the claims; the diocese will need to address the judge’s concerns as negotiations continue.
Bishop Michael Barber told Catholics in the diocese that the court had identified issues to correct and that the diocese would study the ruling. He called the decision a setback but said the diocese remained committed to fair treatment for survivors and to serving its roughly 500,000 Catholics.