The Diocese of Milwaukee filed a petition for chapter 11
relief on January 4, 2011 after twenty years of dealing with sexual abuse
claims and an unfavorable ruling on its insurance coverage. In re Diocese of
Milwaukee, Case No. 11-20059 (Bankr. E.D. Wisc. 1/4/11). Milwaukee is the
eighth Catholic Diocese out of 194 to seek bankruptcy protection as the result
of sex abuse claims. The Catholic Diocese bankruptcies illustrate how
bankruptcy can help to resolve complex social problems as well as mere
The Diocese bankruptcies share several common factors.
1. They are precipitated by overwhelming tort claims involving horrific crimes
perpetrated by persons in positions of authority. According to the Diocese of
Milwaukee, "A tragedy that runs contrary to every teaching and tradition
of the Church has unfolded in the Church as a whole and in the Archdiocese in
particular: a small number of clergy and others took advantage of their
positions of trust and respect in the community to sexually abuse children.
("The Abuse")." The website of the Archdiocese lists 44 priests
who have "substantiated reports of abuse of a minor."
2. Many of these incidents happened a long time ago. Of the 44 priests listed
on the website, 17 are deceased. According to the Archdiocese, it took formal
steps to address the abuse problem in 1989.
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