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A Message from the Rector | Chapter 11 Reorganization
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Dear Cathedral Family,
As Archbishop Lori announced last Friday, the Archdiocese of Baltimore has filed for Chapter 11 reorganization in response to a new law in Maryland that retroactively and permanently removes the time limits on filing lawsuits tied to historic cases of abuse. Allow me to further explain what this decision means for both the Archdiocese and for our parish.
It is important to note that there are two different types of bankruptcy: Chapter 7 bankruptcy and Chapter 11 reorganization. Most of us are familiar with Chapter 7 bankruptcy wherein a company must liquidate its assets to pay creditors and is often forced to go out of business due to losses. Chapter 11 reorganization differs from Chapter 7 bankruptcy in that it does not require a liquidation of assets. The reorganization allows the Archdiocese to continue working with victim-survivors to meet their needs and simultaneously enables the Archdiocese and its parishes to continue operating normally. Some will say that filing for Chapter 11 would make it possible for the Archdiocese to evade its responsibility to compensate victim-survivors when, in fact, the opposite is true. Without Chapter 11 reorganization, lawsuits against the Archdiocese could continue indefinitely, meaning litigation costs and settlements would likely exceed many millions of dollars. Therefore, the money available for settling claims could feasibly be exhausted by only a few lawsuits. Chapter 11 reorganization allows the Archdiocese to allocate available assets to a trust fund and to then be distributed equitably to all victim-survivors seeking reparation rather than a select few. Chapter 11 also establishes a time frame in which lawsuits can be filed and resolved while the ministries of the Archdiocese continue.
Meanwhile, our parish operations and ministries will continue as normal. All parishes, schools, and funds are separately incorporated. Cathedral funds such as Vision of Hope capital campaign funds, Preservation Trust funds, investments, parish savings, and similar funds are exempt from reorganization and, therefore, protected. Contributions you make to our Cathedral parish will be used for their intended purpose and will not go towards the legal fees of the Archdiocese.
That being said, toward the end of the reorganization process, which can take between two to three years, all parishes and schools will make an offering toward the trust funds that will be set up to compensate victim-survivors. This does two things: first, it allows all Catholic entities to participate in the compensation justly owed to victim-survivors and secondly, the contribution allows parishes and schools to be relieved of any potential liabilities separate from the Archdiocese of Baltimore.
Below are helpful links and additional resources providing further information on the Chapter 11 reorganization.
More than anything, let us continue to pray for victims of abuse that they may receive the healing and comfort they deserve from our loving and merciful God.
Sincerely in Christ,
Father Louis A. Bianco
Rector
Helpful Links Additional Resources
