St. Cloud Diocese declares bankruptcy

The Diocese of St. Cloud filed for bankruptcy in U.S. Bankruptcy Court Monday, just weeks after reaching a $22.5 million settlement with clergy abuse survivors.

The Chapter 11 bankruptcy filing provides a "framework for resolution" of the clergy abuse claims filed by 70 individuals against 42 priests dating to the 1950s, the diocese said.

The diocese announced its intent to file for bankruptcy in 2018 to pay for the claims, and has been negotiating with attorneys for the survivors since.

"This Chapter 11 reorganization represents the diocese's commitment to finding a fair resolution for survivors," said the diocese news release announcing the filing.

"It's been a long haul, a long process, for survivors," added survivors' attorney Mike Finnegan. "We're glad that they're on the path to resolution and putting the lawsuits behind them."

St. Cloud is the fifth diocese in Minnesota, and the 26th Catholic diocese or religious order in the nation, to file for bankruptcy. In all cases, it followed a wave of lawsuits charging priest sexual misconduct with minors.

The New Ulm Diocese, Duluth Diocese and Archdiocese of St. Paul and Minneapolis have emerged from bankruptcy, said Finnegan. Winona Diocese has not reached a resolution, he said.

The Crookston Diocese, with 15 abuse lawsuits, did not file for bankruptcy.

The $22.5 million survivor fund will be administered by an independent trustee appointed by the bankruptcy court, with input from the committee representing survivors' interest, the diocese said.

The funds "are made up of insurance and benefits coverage settlements, cash and property contributions from the diocese, and contributions from parishes," the diocese said.

In addition, the St. Cloud Diocese has agreed to release the personnel files and other information related to the clergy who were credibly accused of sexual abuse of minors.

In 2014, the diocese released a list of 33 priests who had been accused of sexual misconduct. That list grew to 42, following the lawsuits and investigations across the country, said Finnegan.

Bishop Donald Kettler was not available for comment, but made a statement following the announcement of the March 26 legal settlement.

"I am particularly grateful to the survivors of abuse for their courage in coming forward and sharing their experiences, and I again apologize on behalf of the Church for the harm they suffered," Kettler said. "I remain committed to assist in the healing of all those who have been hurt, and I hope this is another step in that direction."

Jean Hopfensperger • 612-673-4511