Alaska diocese plans to declare bankruptcy

FAIRBANKS, Alaska — The Catholic Diocese of Fairbanks, Alaska, plans to file for bankruptcy after failed talks with an insurer and mounting legal expenses from clergy sex-abuse claims, becoming the sixth U.S. diocese to seek Chapter 11 protection.

Fairbanks Bishop Donald J. Kettler said, “I am legally and morally bound to both fulfill our mission and to pursue healing for those injured.” The Chapter 11 filing could come by the end of March.
More than 140 people have filed some 150 claims against the diocese in state court, according to the diocese. Those cases are “decades old, stretching from the 1950s through the early 1980s,” the diocese said. Settlement talks with attorneys for the victims began last summer but were scuttled by “the reluctance of a key insurance carrier to participate meaningfully in the process.” Legal expenses also led them to file for bankruptcy, according to Kettler.

The Catholic dioceses of Spokane, Wash.; Portland, Ore.; Tucson, Ariz.; Davenport, Iowa and San Diego have also filed for Chapter 11 bankruptcy because of sex-abuse lawsuits. All but Davenport have emerged with judge-approved settlements. A judge is scheduled to hold hearings on Davenport’s settlement and plan for reorganization March 5. The Fairbanks diocese, which encompasses northern Alaska, is the nation’s largest geographically and is the only U.S. diocese under the Vatican’s missionary wing. Only eight of the diocese’s 46 parishes are financially self-sustaining, said Kettler.