Civil abuse suits against Baltimore Archdiocese prevented — for now

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A federal judge this month ruled out — for now — civil lawsuits intended to pressure the Archdiocese of Baltimore to settle with survivors of child sexual abuse.

As the archdiocese’s bankruptcy case approaches the three-year mark with the parties still far apart in settlement negotiations, a handful of survivors asked for permission to file civil lawsuits, a strategic move intended to introduce the threat of a massive jury verdict.

U.S. Bankruptcy Judge Michelle Harner wrote in the June 5 order that the case is at a critical point, with the church and the survivors having proposed very different reorganization plans.

“The Court hears the frustration of these (and other) creditors in this case; creditors want a resolution,” Harner wrote.

“Most waited years to obtain the right to bring actions against the debtor and then were prevented from exercising those rights by the debtor’s filing of this case. That frustration is real and understandable. The Court must, however, also consider the best interests of the bankruptcy estate and all creditors with claims against it.”

The bankruptcy process protects organizations from civil lawsuits, allowing them to create a plan to compensate creditors as fairly as possible. But judges can lift the stay on civil cases under certain circumstances and have done so in other diocesan bankruptcies, lawyers said.

The archdiocese last month proposed a plan in which it would pay survivors about $44 million and its affiliates — mostly churches and schools — would pay a to-be-determined amount if they choose to opt into the settlement. The committee representing survivors proposed an April plan in which the archdiocese and its affiliates would pay more than $441 million. Two insurance carriers have agreed to pay $125 million into the eventual settlement; negotiations with others are ongoing.

A contested hearing to confirm one reorganization plan or the other is set for September. In the meantime, Harner ordered the parties to convene for virtual settlement hearings every Monday for about two months.

“There is no doubt that bankruptcy disrupts and delays creditors’ rights and remedies, but it also can, in the end, promote a more fair and a more just resolution for all,” Harner wrote.

Ed Caldie, a partner at Stinson in Minneapolis who represents the survivors’ committee, declined to comment.

Christian Kendzierski, a spokesperson for the archdiocese, said the ruling means “the Chapter 11 process will continue as intended.”

“As mentioned in the order, the Court’s decision continues to bring all claims into a single forum and ensures they are all addressed in a consistent and equitable process where claims are resolved together,” Kendzierski stated in an email.

But the order is only temporary. Harner wrote that if a resolution isn’t reached in the next few months, she might have a different opinion on whether civil lawsuits should be allowed.

She wrote, “If a plan cannot be confirmed by the end of September 2026 — the three-year anniversary of this case — the delicate balance of competing interests required by (precedent) may tip in another direction.”