St. Cloud Diocese to declare bankruptcy after sex abuse claims

The Catholic Diocese of St. Cloud will become the fourth Minnesota Catholic institution to declare bankruptcy following a flood of clergy sex abuse claims.

Its announcement reinforced Minnesota's position as the state with the largest number of bankruptcies related to clergy sex abuse. It follows dioceses in New Ulm and Duluth, as well as the Archdiocese of St. Paul and Minneapolis, which filed for Chapter 11 in 2015.

The St. Cloud diocese is facing 74 claims of clergy sex abuse. Thirty-one clergy serving 30 parishes are accused of abusing children over the decades.

"This approach is the best way to ensure that available resources will be distributed equitably to all the victims and survivors, while allowing the diocese to continue its vital ministries that benefit the people of our 16 counties," Bishop Donald J. Kettler said in a statement released by the diocese.

Kettler said he is committed to openness and transparency about how they are working to resolve the lawsuits.

"We will keep pastors and parishes informed about the process as it moves forward," he said in the statement.

Kettler made the announcement at a meeting in Albany with clergy and staff from all parishes.

He did not say when the Chapter 11 filing would take place.

The bankruptcy announcement did not come as a surprise, said St. Paul attorney Jeff Anderson, who represents the majority of victims in St. Cloud and other dioceses. Anderson said his office had been in mediation with the St. Cloud diocese and its insurers for nearly a year, working on a pre-negotiated settlement plan before the actual bankruptcy filing.

The Crosier Fathers and Brothers, a Catholic religious order with a community in nearby Onamia, Minn., chose that strategy before filing for bankruptcy last year, he said.

The Crosiers reached an agreement to pay $25.5 million to 43 individuals abused by members of their religious order in Minnesota and Arizona.

Anderson said his office would continue to work for fair settlement in St. Cloud.

"Progress has been made," Anderson said. "We will continue working to bring this to closure."

More than 800 Minnesotans who were sexually abused as children filed claims in recent years against their parish priests and other clergy who abused them inside churches, schools, on special outings, even in their parents' homes.

The flood of litigation followed the passage of the 2013 Minnesota Child Victims Act, which provided for a three-year extension of the statute of limitations for such claims.

In the St. Cloud diocese, 74 abuse claims were made those three years. That compares to roughly 125 claims filed in both the dioceses of Duluth and Winona, about 20 in the Crookston diocese, and more than 400 in the Twin Cities archdiocese.

Bankruptcy reorganization allows the dioceses to consolidate all of their claims under one judge and one court, instead of handling each abuse claim individually. It generally does not affect the day-to-day operation of local churches and other Catholic institutions, as they are incorporated separately under Minnesota law.

The St. Cloud diocese stressed that in its news release.

"It is not expected that reorganization would affect the normal operations of parishes or Catholic schools in the diocese," it said.

The Diocese of St. Cloud covers an estimated 133,000 Catholics in 16 central Minnesota counties. It is home to 27 Catholic grade schools, two high schools and 131 parishes, whose clergy and staff attended the Wednesday meeting during which Kettler announced the bankruptcy.

The diocese, like others in Minnesota, had not publicly disclosed the names of clergy accused of sexually abusing children until 2014.

Jean Hopfensperger • 612-673-4511