The Diocese of Oakland proposed a $117 million trust this week to settle hundreds of lawsuits alleging decades of priest sexual abuse, which victims’ attorneys called “pathetic.”
The diocese’s proposed payout highlighted a reorganization plan it filed late Friday to emerge from Chapter 11 bankruptcy and settle 350 lawsuits alleging Catholic church abuse.
The victims’ trust would be funded over several years and include the title to a Livermore property the church says could be worth tens of millions of dollars.
On Saturday, sexual assault victims’ attorneys called the plan “a scam and a sham” and claimed the diocese undervalued its assets to avoid paying more.
It would be less than the $880 million settlement reached last month between the Archdiocese of Los Angeles and more than 1,350 Southern California church leaders who sued.
Rick Simons, an attorney for many sexual assault victims and Northern California clergy abuse co-liaison counsel, called it a “cram-down plan.” They are trying to force the plan on the survivors without their consent because they refused to negotiate a fair plan and want to save money.
Simons said, “It’s a ridiculous effort to hide their assets and just not pay their debts as part of their reorganization. “Their amounts are pathetic.”
The Diocese of Oakland said the plan offered “just and equitable compensation,” and that the trust’s value could grow between $43 million and $81 million due to its perceived value of the Livermore property’s title.
The diocese also proposed giving the trust all its insurance policy rights and interests, allowing abuse victims to sue the insurers.
“We recognize that no amount of money can fully and satisfactorily compensate survivors for the abuse they suffered,” Bishop Michael C. Barber said in a statement. “With that in mind, we believe the plan compensates survivors fairly and allows the Diocese of Oakland to continue spreading the Gospel, serving the faithful and the poor.”
The proposed settlement follows a flood of lawsuits made possible by a recently closed three-year filing window for statute-expired cases. Many lawsuits accused priests of decades of molesting parishioners without consequence.
In late 2023, the diocese filed for Chapter 11 bankruptcy just months after that special-filing window closed.
The abuse victims and their attorneys immediately condemned the move, which halted their lawsuits while a bankruptcy judge reviewed the church’s finances and assets.
When the church filed for bankruptcy in May, Dan McNevin, an Alameda County abuse survivor, called it “another form of cover up.” His lawsuit against the church 20 years ago was one of 56 that settled for an average of $1 million, dwarfing the diocese’s latest proposal, especially after inflation.
The Friday filing established a “Survivor’s Trust” with $103 million from the diocese and $14.25 million from the Roman Catholic Welfare Corporation/Schools.
It included the Livermore land title, transferred “on an as-is, where-is basis.” It was planned as a high school but is now vacant.
The trust would be funded in installments of $65 million and $10 million to $13 million over several years.
The diocese said it filed the plan on the last day it had exclusive rights to file a bankruptcy court plan of reorganization.
The diocese said Friday it would “obtain a loan, use cash resources and sell real estate,” but provided few details.
“We are hopeful the survivors nonetheless recognize the Diocese is working in good faith to try to compensate them fairly and equitably,” Barber wrote to parishioners in October.
However, the abuse victims’ attorneys argued that not funding the trust immediately would short-change church victims because inflation and time could devalue the trust. They questioned whether the church’s financial accounting was transparent.
The attorneys also advised the church to sell its vast regional real estate holdings, which far exceed the settlement amount. Jeff Anderson, an attorney representing over 100 victims, suggested selling dozens of parishes without priests.
“They’re prioritizing their own interests over that of the children that they harmed,” said Jennifer Stein, a victim attorney. “We believe they can pay significantly more, and they continue to choose their own interests above that of their former students, parishioners, and the Catholics and community they were serving, and continue to serve.”
