EL PASO, Texas (KFOX14\/CBS4) \u2014 The Catholic Diocese of El Paso has filed for Chapter 11 bankruptcy protection, citing mounting financial pressure from clergy sexual abuse litigation and ongoing operating deficits, according to a court declaration filed by Chief Financial Officer Gregory J. Watters.<\/p>\n
The filing, submitted to the U.S. Bankruptcy Court for the Western District of Texas, outlines the Diocese\u2019s financial challenges and requests court approval to maintain essential operations during the reorganization process. The Diocese serves more than 650,000 Catholics across a vast 26,686-square-mile region in far West Texas, operating 58 parishes, mission churches, schools, and charitable ministries.<\/p>\n
Church officials say the primary reason for the bankruptcy filing is the financial strain caused by clergy sexual abuse claims. The Diocese currently faces 12 pending lawsuits and anticipates additional claims before statutes of limitations expire. Leaders warn that legal defense costs and potential settlements could reach tens of millions of dollars\u2014far exceeding the Diocese\u2019s available unrestricted assets.<\/p>\n
Without bankruptcy protection, officials said, early claimants could receive compensation while later survivors might receive nothing, a scenario the Diocese hopes to avoid through an orderly reorganization process.<\/p>\n
The Diocese has struggled financially for years. For the fiscal year ending June 30, 2025, it reported approximately $15.36 million in expenses against $14.96 million in revenue, resulting in a net loss of about $401,700. Officials described the Diocese as a \u201cMission Diocese,\u201d relying heavily on donations, parish assessments, and limited grants, which have not kept pace with operating costs.<\/p>\n