Sexual Abuse Survivor Attorneys in Archdiocese of Baltimore Bankruptcy Case are Optimistic Following January 5th Hearing

Attorneys representing the Archdiocese of Baltimore and the survivors’ committee will continue mediation, working towards a settlement, as the insurance companies agree to temporarily drop charitable immunity defense

After years of litigation and uncertainty, the Archdiocese of Baltimore bankruptcy case and survivors of clergy sexual abuse is proceeding—and the parties are hopeful about the progress. In a recent hearing on January 5^th, attorneys for both the church and the survivors’ committee expressed cautious optimism that mediation efforts scheduled over the coming months could lead to meaningful progress toward a resolution.

At the hearing, the Archdiocese agreed to temporarily drop its charitable immunity defense. The Archdiocese had argued that under Maryland’s charitable immunity law, the church could only be held liable if it had insurance that covered the survivor’s claim and only up to the amount of insurance coverage. In other words, the Archdiocese claimed that none of its assets could be used to pay survivors.

With this major legal hurdle out of the way, the Archdiocese of Baltimore and the Official Committee of Unsecured Creditors have now scheduled seven mediation sessions in the first quarter of the year. At these sessions, lawyers will come together to negotiate a plan to compensate survivors: the Archdiocese of Baltimore initially proposed a $33 million contribution along with insurance funds, while the committee of survivors is seeking payment of over $888 million. At these mediation sessions, the parties hope to close the gap.

While survivors are generally pleased with the development, they remain impatient with the glacial pace of the mediation. The bankruptcy has been pending for almost two years and little progress has been made toward resolution. Many survivors are elderly and many are ill. These survivors simply cannot afford to wait any longer for some measure of justice and they sincerely hope that the Archdiocese and its insurers approach the upcoming discussions with good faith.

Many diocesan bankruptcy proceedings nationwide have stalled or collapsed over disputes with insurers regarding coverage obligations and settlement contributions. In this case, the bankruptcy court has clarified that insurer participation will be critical to any viable resolution. U.S. Bankruptcy Judge Michelle M. Harner, presiding over the proceedings, has scheduled a status hearing for March 2^nd. Judge Harner has expressed her own frustration over the pace of the discussions and has urged the church and its insurers to dispense with the delay tactics and to get to work on putting together a settlement proposal for the court’s approval.

Grant & Eisenhofer is proud to be representing these survivors and continues to fight for justice and accountability in Baltimore, and for the need for broader systemic change regarding child sexual abuse occurring in religious institutions nationwide.