Boston archdiocese threatens bankruptcy

The Catholic Archdiocese of Boston, relatively cash light but with property holdings of $1.3bn (£800m), has taken the extraordinary step of studying bankruptcy procedures as a solution to hundreds of law suits from victims of sexual abuse by its priests.

The strategy which was reported in the Boston Globe, would freeze all civil actions against the church, shielding it from any new lawsuits.

It has caused consternation in Boston, not least among the lawyers for the hundreds who have accused the clergy of sexual abuse and who were preparing yesterday to open negotiations with church officials on the settlement of claims.

Lawyers for the Greenberg Traubirg firm, which represents about half of the estimated 450 claimants, say there is no point in opening negotiations if the archdiocese files for bankruptcy.

They called on the archdiocese to declare its intentions soon. "They should either go ahead and declare bankruptcy, or stop talking about it," said the firm's Jeffrey Newman.

The sexual abuse suits could cost the archdiocese more than $100m to settle, and could drag on for years.

There was no comment from the archdiocese yesterday. Although filing for bankruptcy would shield the church from lawsuits, it would also represent an admission of liability from the Archdiocese on the sex abuse claims. However, the cardinal would no longer have to answer questions arising from pre-trial depositions.

A similar threat of bankruptcy by the Dallas archdiocese five years ago saw a $119.6 million award from a jury shrink to a $31 million settlement.