{"id":3270,"date":"2026-06-19T05:31:52","date_gmt":"2026-06-19T12:31:52","guid":{"rendered":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/19\/2-years-after-catholic-diocese-bankruptcy-sex-abuse-accusers-lawyers-say-church-delaying-settlement\/"},"modified":"2026-06-19T05:31:52","modified_gmt":"2026-06-19T12:31:52","slug":"2-years-after-catholic-diocese-bankruptcy-sex-abuse-accusers-lawyers-say-church-delaying-settlement","status":"publish","type":"post","link":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/19\/2-years-after-catholic-diocese-bankruptcy-sex-abuse-accusers-lawyers-say-church-delaying-settlement\/","title":{"rendered":"2 years after Catholic diocese bankruptcy, sex-abuse accusers\u2019 lawyers say church delaying settlement"},"content":{"rendered":"
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Two years after the Roman Catholic Diocese of San Diego filed for bankruptcy to help manage its response to hundreds of child sexual abuse lawsuits, attorneys for some of the survivors say the diocese has taken unprecedented steps to delay resolving the case.<\/p>\n

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More than 480 people who say they were sexually abused decades ago by San Diego-area Catholic priests have filed claims against the diocese in the Chapter 11 bankruptcy proceedings. But the diocese and its insurer have filed objections seeking to dismiss more than 160 of those claims. Individuals whose claims are dismissed would receive no compensation once the bankruptcy is ultimately resolved.<\/p>\n

\u201cThat many claim objections is unprecedented,\u201d said Stacey Benson, an attorney representing some of the survivors. Her firm, Jeff Anderson & Associates, regularly works on similar Catholic diocese bankruptcy litigation nationwide.<\/p>\n

\u201cSomething to that scale has never happened before,\u201d Benson said.<\/p>\n

A spokesperson for the diocese declined to comment, citing the pending litigation. Attorneys representing the diocese\u2019s insurer, the Catholic Mutual Relief Society of America and the Catholic Relief Insurance Company of America, also declined to comment. Attorneys representing the diocese did not respond to a message seeking comment.<\/p>\n

In court filings, attorneys for Catholic Mutual have argued that the number of objections is not abnormal, and that they are designed to help \u201creach a collective solution by disallowing clearly disallowable claims.\u201d The attorneys have argued that the objections \u201cwill help clarify the number of allowed claims and associated insurance coverage, enable progress toward a global resolution, and bring survivor-creditors closer to receiving compensation.\u201d<\/p>\n

Some individuals have already received compensation. Earlier this year, more than 40 of the survivors whose claims were objected to accepted settlement terms of $75,000 each, for a total of more than $3 million.<\/p>\n

Catholic Mutual attorneys wrote in court filings that they offered those payouts \u201cas a matter of compromise (and) to avoid any claimant potentially receiving nothing.\u201d<\/p>\n

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The diocese, which includes 96 parishes and serves more than 1.3 million Roman Catholics in San Diego and Imperial counties, filed for bankruptcy in June 2024. Cardinal Robert McElroy, who was then the diocese\u2019s leader, wrote in an open letter to parishioners at that time that \u201cbankruptcy offers the best pathway to achieve\u201d the dual goals of justly compensating sexual abuse survivors and furthering the church\u2019s mission of education, service and outreach to the poor and neglected.<\/p>\n

It was not a new tactic. The local diocese also filed for bankruptcy in 2007, eventually settling more than 140 claims of sexual abuse for $198 million. At least a dozen other dioceses across the country have also filed for bankruptcy to help manage their response to child sexual abuse lawsuits.<\/p>\n

Chapter 11 bankruptcy proceedings give a debtor time to reorganize its business, resolve debts and then restart its operations. The proceedings also trigger a halt to all lawsuits against the debtor until the bankruptcy is complete and a universal settlement of all the claims is reached through the bankruptcy process.<\/p>\n

When the local diocese filed for bankruptcy two years ago, it was facing more than 460 lawsuits stemming from alleged sexual abuse by clergy that occurred decades ago. Those suits were filed during a three-year window that opened in 2020 and temporarily removed the statute of limitations for such claims.<\/p>\n

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Attorneys for the survivors, such as Irwin Zalkin, whose firm represents more than 100 victims, have long maintained that bankruptcy is a way for the Catholic church to reduce the compensation it must pay.<\/p>\n

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Zalkin has also alleged in a separate lawsuit that before the three-year window opened in 2020, the local diocese fraudulently transferred hundreds of properties to holding companies in order to reduce its assets and thereby lower the amount of money it might have to pay as part of a settlement. That lawsuit, filed in San Diego Superior Court, has also been halted because of the bankruptcy.<\/p>\n

The Chapter 11 proceedings in 2007 were also marred by accusations from victims\u2019 attorneys that church officials deliberately hid assets from the bankruptcy court in order to limit damages.<\/p>\n

Zalkin and Benson now allege that the diocese is using the claim objections in the bankruptcy case to delay a settlement, and that the diocese hasn\u2019t restructured as required by Chapter 11 bankruptcy.<\/p>\n

\u201cHere we are \u2026 two years after the filing of the bankruptcy, essentially where we started when the bankruptcy was filed,\u201d Zalkin said Wednesday following a hearing in the case in downtown San Diego. \u201cThey\u2019re actually making money, they\u2019re profitable, they\u2019re continuing to operate (and) they haven\u2019t restructured as they should be under Chapter 11.\u201d<\/p>\n

Benson accused the diocese of improperly using bankruptcy law to try to dismiss claims that should be considered on their merits \u2014 something a bankruptcy judge doesn\u2019t have authority to do.<\/p>\n

\u201cIt\u2019s another legal tactic to try to escape accountability,\u201d she said.<\/p>\n

In court papers, attorneys for Catholic Mutual argued that any claims rejected by the court, and the roughly 40 claims that were settled, will actually \u201c(enhance) rather than (reduce) the prospects of a consensual (settlement) plan.\u201d<\/p>\n

Another issue currently roiling the survivors\u2019 attorneys was a decision by San Diego-area U.S. Bankruptcy Court Chief Judge Christopher Latham to limit the ability of specialized bankruptcy attorneys who are also parties to the case to assist the survivors\u2019 attorneys in responding to the objections.<\/p>\n

Those bankruptcy attorneys are appointed by the government to represent the interests of unsecured creditors \u2014 in this case, the sexual abuse survivors. The survivors and their attorneys, who are mostly state-court civil litigators unfamiliar with federal bankruptcy law, often rely on these specialized attorneys to help with bankruptcy matters.<\/p>\n

\u201cThere\u2019s no other order in the country that we\u2019re aware of\u201d that limits such cooperation, said\u00a0Sasha Gurvitz, one of the specialized bankruptcy attorneys from the firm KTBS Law.<\/p>\n

\u201cIn many ways, that hamstrings the state-court councils\u2019 work dealing with these objections,\u201d Zalkin said.<\/p>\n

As of this week, Latham had dismissed four of the claims that the diocese and Catholic Mutual had objected to and was considering whether to dismiss others. Attorneys for one of the individuals whose claim was dismissed have already appealed that ruling in U.S. District Court.<\/p>\n

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Attorneys for the Roman Catholic Diocese of San Diego insurer’s argue they’re seeking a fair resolution in the hundreds of claims.<\/p>\n","protected":false},"author":1,"featured_media":3269,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3270","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-courts"],"yoast_head":"\n2 years after Catholic diocese bankruptcy, sex-abuse accusers\u2019 lawyers say church delaying settlement - Los Angeles Moving Insider<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/19\/2-years-after-catholic-diocese-bankruptcy-sex-abuse-accusers-lawyers-say-church-delaying-settlement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2 years after Catholic diocese bankruptcy, sex-abuse accusers\u2019 lawyers say church delaying settlement - 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