Iowa Diocese Files for Bankruptcy over Sex Abuse Cases

The Roman Catholic Diocese of Davenport filed for Chapter 11 bankruptcy this week, the fourth diocese in the nation to seek financial protection to deal with priest sex abuse cases.

Bishop William Franklin said the diocese was left with no other alternative to settle more than two dozen claims against priests accused of sexual abuse of children. He said the move would ensure the financial health of the church.

“While providing just and fair compensation to victims and survivors, we also believe that the decision to reorganize is the best way in which we will be able to continue the church’s mission,” Franklin wrote in a letter to members posted on the diocese Web site.

The Davenport diocese joins Portland, Ore., Spokane, Wash., and Tucson, Ariz. Like those diocese and others nationwide, Davenport has been hit hard by allegations that its leaders either knew or should have known about its priests’ misconduct with young boys and girls, yet failed to discipline them.

Since 2004, the diocese has paid more than $10.5 million to resolve dozens of claims filed against priests, including a $9 million settlement reached with 37 victims in fall 2004. Since then, the diocese or former priests under its supervision have been held liable by juries in civil trials.

One of the claims brought against the diocese reached to California after a person claimed to have been molested by a Diocese of Davenport priest in San Diego in the 1960s. That lawsuit was allowed by a 2002 California law that for one year rolled back the statute of limitations on clergy abuse cases.

The Diocese of Davenport unsuccessfully challenged that law in federal court in San Diego last year. The Archdiocese of Los Angeles had attempted to join that challenge but was denied.

The decision to file for bankruptcy now is being driven by a new set of claims aimed at the diocese and retired Bishop Lawrence Soens, church officials and others say.

Soens, who served as Bishop in Sioux City in northwest Iowa, has been accused by as many as 15 former students during his tenure as priest and principal at a Catholic high school in Iowa City during the 1960s. Soens, who retired in 1998, denies the allegations.

The first of three trials involving Soens and the diocese was scheduled to begin Oct. 23, but a victims’ lawyer said it likely will be dismissed in light of the bankruptcy filing.

“I think it’s a sad day for victims of clergy abuse in the Davenport Diocese as well as its parishioners,” said the lawyer, Craig Levien. “I believe it’s just an unnecessary step … with the real purpose being an effort to try and eliminate future responsibility.”

Deacon David Montgomery, a diocese spokesman, said the diocese is aware of 25 pending sexual abuse claims against former priests, but others may be forthcoming.

One issue that has slowed bankruptcy proceedings in Spokane and Portland is whether the property and assets in each individual parish fall under the diocese ownership umbrella.

Montgomery said the parishes in the diocese incorporated separately in the 1950s and that church lawyers intend to argue that parish assets cannot be lumped in with the diocese. Court documents indicate the diocese lists assets of nearly $4.5 million and liabilities of nearly $1.7 million.

The Davenport Diocese began in 1881, covers 22 counties in southeast Iowa and has more than 105,000 parishioners in 84 parishes.