Winona-Rochester diocese to file for Chapter 11 bankruptcy

The Diocese of Winona-Rochester has announced it will file for Chapter 11 bankruptcy this month, the fifth Catholic institution in Minnesota to say it will do so as it deals with claims of clergy sex abuse.

The string of bankruptcies is more than in any other state. The Winona-Rochester diocese faces 121 claims of abuse by clergy members who are now dead or have been removed from ministry, Bishop John Quinn wrote in a letter distributed with church bulletins Sunday.

Filing for bankruptcy before the end of November, he wrote, would help reorganize diocesan finances to compensate victims and keep the diocese's daily operations going.

"Together, we are committed to creating an environment of healing for these victims and their families, as well as for all of us in our Diocesan community," he wrote.

Dioceses in New Ulm and Duluth have already filed for bankruptcy. The Catholic Diocese of St. Cloud has also announced it will declare bankruptcy, but hasn't done so yet. A spokesman said the St. Cloud diocese is still in discussions with insurance companies and survivors' attorneys and hopes to reach an agreement before filing bankruptcy to minimize legal fees and maximize money for survivors.

The Archdiocese of St. Paul and Minneapolis filed for Chapter 11 in 2015 and in September, a bankruptcy judge approved a $210 million settlement between the archdiocese and more than 400 survivors — the largest such settlement in the nation.

Since the Legislature approved the Minnesota Child Victims Act in 2013, which provided a three-year extension of the statute of limitations, more than 800 Minnesotans who were sexually abused as children have filed claims against their parish priests and other clergy who abused them.

Bankruptcy reorganization allows the dioceses to consolidate their claims under one judge and one court instead of handling each abuse claim individually.

"It's a step that had to happen," Mike Finnegan, a victims' attorney with the St. Paul firm Jeff Anderson & Associates, said of the Winona-Rochester bankruptcy plans. "There's an opportunity for them to work with the survivors sooner than later."

He added that some outstate dioceses may have been waiting for the Twin Cities archdiocese's settlement.

The only diocese outside the metro that hasn't filed or announced it will file for bankruptcy is in Crookston, which faces about 20 sex abuse claims. That compares to 74 abuse claims in St. Cloud, 125 claims in Duluth and 101 claims in New Ulm.

In his letter Sunday, Quinn reassured the community that the bankruptcy won't affect day-to-day operations of the Winona-Rochester diocese, its parishes and schools and he wrote that the "path forward must include public acknowledgment of [victims'] pain and an apology for it as well as financial compensation."

The diocese serves an estimated 131,000 Catholics across 20 southern Minnesota counties.

Kelly Smith • 612-673-4141