A federal judge this month rejected a request from the Diocese of Oakland, California, to resolve its ongoing bankruptcy proceedings, arguing that the diocese had not satisfied statutory requirements to do so while dismissing claims that the diocese should be granted a special religious dispensation. <\/p>\n
The diocese had proposed a plan earlier in the year to pay more than $200 million into an abuse victims\u2019 fund. A committee of survivors countered with a proposed payout of more than $300 million, which the diocese itself subsequently opposed.<\/p>\n
Judge William Lafferty said in an Oct. 2 decision that the diocese had failed to demonstrate that it was undergoing a \u201csubstantial burden\u201d on its religious rights in being required to adhere to federal bankruptcy proceedings. <\/p>\n
The judge dismissed as \u201cincorrect and impossible\u201d a scenario suggested by the diocese that would result in what Lafferty described as an \u201capocalyptic forced sale of all churches in the Oakland Diocese\u201d under the federal bankruptcy court. <\/p>\n
Such a scheme, Lafferty said, \u201ccan never be compelled in the bankruptcy system.\u201d <\/p>\n
Lafferty also expressed concern that the diocese\u2019s \u201cliquidation analyses\u201d are \u201cstructured in a manner that tilts the playing field\u201d in favor of the diocese itself.<\/p>\n
The federal judge admitted that the ruling was \u201cnot a happy result\u201d for anyone involved in the trial, including for abuse victims, who he said have been \u201cdeeply \u2026 immersed\u201d in the trial since 2023. <\/p>\n
The diocese, meanwhile, \u201chas prosecuted this case honorably and with great integrity,\u201d he said. <\/p>\n
The judge urged the diocese and abuse victims to operate with \u201ccontinuing dialogue and relentless good faith.\u201d <\/p>\n
\u201cThere is no guarantee of success in such endeavors, but also no reason not to begin again,\u201d he said. <\/p>\n