March 3, 2017 / 7:08 PM / 5 months ago

Catholic diocese in Minnesota files for bankruptcy over sex abuse

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March 3 (Reuters) - A Catholic diocese in Minnesota filed for bankruptcy on Friday, joining more than a dozen other U.S. Catholic districts and religious orders driven to seek protection from creditors by the church's clergy sex abuse scandal.

The Roman Catholic Diocese of New Ulm, which is southwest of Minneapolis, said in a statement it will use Chapter 11 bankruptcy to reorganize its finances and produce a plan to pay creditors.

The rural diocese is defending 101 lawsuits involving alleged sex abuse by clergy mostly from the 1950s through the 1970s. Minnesota had lifted the civil statute of limitations for a period of three years ending May 25, 2016, allowing claims from prior decades to be brought.

"It is unknown how long this will take, but we seek to complete the reorganization process as promptly and efficiently as possible," the diocese said.

Bishop John LeVoir in a statement said reorganization would allow the diocese "to fulfill its obligation, as much as possible, to victims and survivors of clergy sexual abuse of minors, while continuing to carry out its ministry."

Bankruptcy provides a way for debtors and creditors to resolve claims. The broader work within the Catholic Church of rooting out sex abuse is being overseen by the Pontifical Commission for the Protection of Minors, set up by Pope Francis in 2014.

The diocese is the third in Minnesota to file for bankruptcy in recent years over claims of clergy sex abuse.

Reports of sex abuse by priests and coverups by the Catholic hierarchy exploded in U.S. media in 2002 and have pushed prominent dioceses like Milwaukee's into bankruptcy and have led to about $3 billion in settlements.

The Diocese of New Ulm in court papers proposed the appointment of U.S. Bankruptcy Judge Gregg Zive of Nevada to serve as a mediator. The diocese said it has already been in negotiations with lawyers for individuals who have brought sex abuse claims.

"The diocese intends to continue these negotiations and believes that a structured mediation setting would best facilitate a resolution for all of the interested parties in these cases," the diocese said in its court papers.

Zive oversaw mediation of similar claims in the Chapter 11 bankruptcy of the Roman Catholic Diocese of Stockton, California. The Stockton diocese received court approval for its bankruptcy reorganization in January.

Reporting by Jim Christie in San Francisco; Editing by Matthew Lewis

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