Archdiocese of Baltimore files new proposed plan for Chapter 11 reorganization

The Archdiocese of Baltimore submitted a proposed plan for reorganization May 15 in an effort to complete its Chapter 11 bankruptcy reorganization, with the goal of equitably compensating victims of child sexual abuse by clergy and others affiliated with the Catholic Church in Maryland.

The proposal includes establishing a Survivor Compensation Trust totaling at least $168.9 million to evaluate and resolve claims. That amount would be funded by contributions from the archdiocese and its insurers. 

Additional funds will be contributed by participating parishes, schools and related Catholic entities, including Catholic Charities. That amount is still to be calculated.

A statement from the archdiocese at the time the plan was filed said, “At its core, the proposed plan seeks to provide equitable compensation to survivors while sustaining the Church’s mission and ministries. It reflects a commitment to transparency and a realistic assessment of available resources.”

The plan includes $43.9 million from the archdiocese and at least $125 million combined from two insurance companies that covered parishes, schools and the archdiocese during the times covered by some of the claims. 

Funds to the trust from the archdiocese would come from unrestricted assets. The plan does not anticipate the archdiocese selling any real estate, according to Christian Kendzierski, archdiocesan executive director of communications.

The parishes or other entities would also contribute from unrestricted assets.

Other insurance carriers are expected to contribute to the trust as well, he said, although the specifics cannot be revealed now because the conversations are part of the mediation process, which is confidential.

The archdiocese’s proposed plan also includes “non-monetary obligations to further enhance the existing child safety and protection policies and procedures within the archdiocese,” which is something the survivors’ committee, known as the Unsecured Creditors Committee, has requested. 

Bishop Parker, who has testified in the court process and has been present for many hearings, said the archdiocese discussed with the Creditors Committee the possibility of retaining an independent, third-party consultant who is an expert on the subject matter to review archdiocesan policies and procedures for screening and training. 

The court approved in February a joint motion by the archdiocese and the committee to designate Guidepost Solutions as that agency.

“We welcome the opportunity to review our zero-tolerance policies. Our goal is to have the safest possible environment for our young people, and to ensure that what happened in the past would never be repeated,” he told the Catholic Review.

The archdiocese’s statement said, “While the archdiocese remains firmly committed to reaching an agreed-upon resolution through mediation, no final agreement has yet been achieved. The proposed plan is intended to advance discussions, provide a framework for resolution and support continued dialogue among all parties.”

Bishop Parker said, “Bankruptcy is the clearest path toward achieving the objectives of survivors. In other words, as a result of filing for bankruptcy, all victim-survivors with a claim in our case have the opportunity to receive compensation.” 

He added, “Had we not filed for bankruptcy, there would have been the proverbial rush to the courthouse. And a very, very small number of victims would have likely received substantial awards, and the vast majority of victims survivors would have received little or nothing.” He said that would have been the case for any victim-survivor who chose to represent himself or herself or who did not already have an attorney. 

Bishop Parker and Archbishop William E. Lori have been present in the bankruptcy court for three separate sessions in which victim-survivors provided statements about the impact of their abuse by clergy or others connected to the Church. After the third such session, Archbishop Lori said hearing their experiences was “soul searing” and that it was important for them to be heard.

Bishop Parker said what struck him the most about these sessions as well as other conversations he has had over the years with victim-survivors is that they “want to feel that somebody in the church cares for what happened to them and what is happening to them now.”

He said, “More than anything, they want to be able to both share their story and have some kind of a voice in achieving the outcome that is desired for a sense of justice, for a sense of healing and for a sense of closure for them. They want to feel that they are able to participate in the process, and they really want to understand the process as well, so that they can have an appropriate voice within the reorganization process,” he said.

He believes these needs are addressed by each claimant having a vote in the process of confirming the plan to set up the Survivor Compensation Trust, and that they are represented by the Unsecured Creditors Committee, a group of seven victim-survivors who represent all in the case. 

“I’m grateful for the fact that we have the seven victim survivors who form the committee, because their real responsibility is to represent the entire community of victims who have a claim in this reorganization,” the bishop said.

Parishes and certain Catholic entities choosing to participate in the archdiocese’s plan of reorganization can achieve a unified and coordinated resolution by filing, at some point, for an abbreviated and streamlined version of Chapter 11. If this prepackaged reorganization is confirmed, operations in the parishes and schools would continue without interruption. “The terms of such bankruptcies would be established in advance thus enabling them to be resolved in a short period of time and provide certainty and finality to the process,” the archdiocese’s statement said.

The archdiocese originally envisioned that parishes, schools and other affiliated entities could participate in the bankruptcy and receive protection through what is known as a channeling injunction. However, Bishop Parker noted that, although he is not a bankruptcy law expert, he understands that the U.S. Supreme Court’s decision in the Purdue Pharma case changed the landscape on third-party releases. 

“Should the parishes and schools enter bankruptcies, they would be in the process for a very limited period of time, hopefully just a matter of days. But the impact to their operations would not be noticed by the parishioners or school families. We anticipate that the ministries of the parishes and the schools would continue in the normal course, both in the short term and long term,” Bishop Parker said.  

In October 2025, the archdiocese had filed a form plan that would have included $33 million from the archdiocese and other Catholic entities and anticipated significant contributions from insurance carriers.

In April 2026, the Unsecured Creditors Committee filed a proposed plan seeking approximately $526 million from the archdiocese, as debtor in the case, plus affiliated entities and the insurers. Much of that plan was predicated on the committee’s argument that the archdiocese and its parishes and schools should be consolidated into one entity. 

However, Judge Michelle M. Harner, who oversees the case, ruled April 29 that “the structure of the Debtor as a separate entity from, and a service provider to, the nondebtor parishes and schools appears to align with general diocesan structure and Maryland law.”

The Acting Trustee for the U.S. Bankruptcy Court, David W. Asbach, also objected to the Creditors Committee plan, arguing May 7 that its plan is “patently unconfirmable” because the parishes and schools are separate nonprofit corporations and cannot be forced into bankruptcy.

The total number of allowed claims in the case is still unknown, but the court May 7 merged 227 claims into other claims because the claims were amended, superseded or duplicative. 

In April, Harner set a timeline for the next several months to move toward a settlement in the Chapter 11 process. It included a May 15 deadline for parties to file a plan, which the archdiocese fulfilled with its filing. She also set a hearing date for June 8 regarding the disclosure statement that will accompany the plan, and four dates in September for confirmation hearings. Those would be followed by closing arguments Sept. 22, one week before the third anniversary of the archdiocese’s filing for Chapter 11.

“The judge envisions that we would be finalizing this process by the end of September,” Bishop Parker said. “Having spoken with our own bankruptcy counsel, I have also learned that it is possible that some delays could occur that could set those confirmation hearing dates back, but I have asked our own bankruptcy counsel to do everything within our power to remain exactly on the timeline that the judge has set out because we want to resolve this case as quickly as we possibly can.”

He added, “While three years is longer than we had hoped at the outset, it would be quicker than some other dioceses have emerged,” he said. “At this point in time, now more than two and a half years already, our goal truly is to resolve it as quickly as we possibly can.”

After the plan is finalized, an independent claims administrator will determine the amount each claimant will receive from the Survivor Compensation Trust, but it’s unclear how long that process will take.

Bishop Parker said, “It’s important to know that we would like to see survivors compensated as soon as possible. Our goal is that a sense of closure for them is of paramount importance to Archbishop Lori and to me, and that’s our goal. We would like to pay them, and we would like to pay them today.”

In closing, the archdiocese’s statement said, “The archdiocese will continue to listen, to learn, and to seek a resolution that honors the dignity of survivors and strengthens the mission of the Church for generations to come.

“Please continue to pray for all who have been harmed, for their healing and peace.” 

Read an archdiocesan news release on the bankruptcy plan here.

Email Christopher Gunty at editor@CatholicReview.org

Also see

Archdiocese of New York proposes $800 million settlement for abuse claims

Maryland Supreme Court rebukes state, prohibits naming uncharged individuals in AG report

Bankruptcy court rules archdiocese can continue to assist parishes with real estate sales and affirms legal separateness

New Orleans archbishop apologizes to abuse survivors as settlement takes effect

Archdiocese will not assert charitable immunity in bankruptcy case

Victim-survivors tell of mistrust, pain in third court session

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