The El Paso Catholic Diocese, faced with potential \u201castronomical\u201d judgments in a dozen lawsuits alleging clergy sexual abuse, filed for bankruptcy reorganization Friday.<\/p>\n
The 12 lawsuits involving 18 plaintiffs, filed between 2022 and 2025 in Las Cruces, allege sexual abuse by priests at a number of New Mexico parishes between 1956 and early 1982, when southern New Mexico was part of the El Paso diocese.<\/p>\n
\u201cFirst of all, let me say we don\u2019t see it as a way to duck out of our responsibility,\u201d El Paso Bishop Mark Seitz said in an interview with El Paso Matters. \u201cIt\u2019s the only way, with the resources at hand, that we can begin to address this many claimants in an equitable way.\u201d<\/p>\n
El Paso Matters is seeking comment on the diocese bankruptcy filing from attorneys for those who filed suit in New Mexico alleging sexual abuse by priests.<\/p>\n
The diocese\u2019s petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code lists between $10 million and $50 million in assets and $1 million to $10 million in liabilities. The 18 people suing the diocese are the fewest number of sexual abuse plaintiffs that led to a bankruptcy reorganization among more than three dozen Catholic dioceses and archdioceses that have taken that path, according to research by Marie T. Reilly, a law professor at Penn State University.<\/p>\n
Chapter 11 bankruptcy is a legal process that allows a business to reorganize its debts and operations under court supervision while continuing to operate. Another form of bankruptcy, known as Chapter 7, liquidates the assets of a business or organization to pay debts; that is not the path pursued by the El Paso diocese.<\/p>\n
The diocese reorganization petition was filed in the U.S. Bankruptcy Court for the Western District of Texas.<\/p>\n
Seitz said the diocese has been negotiating with attorneys for the people who brought the sexual abuse lawsuits, and court records show the lawsuits were paused in late 2025.<\/p>\n
\u201cIt\u2019s difficult in New Mexico. There\u2019s no effective statute of limitations, and the awards that are being given in court judgments have been astronomical,\u201d he said.<\/p>\n
Seitz said the bankruptcy reorganization filing will allow the victims to recover damages while also protecting the El Paso diocese, which he said \u201cis one of the least resourced dioceses in the country.\u201d<\/p>\n
The bankruptcy filing will have no immediate impact on the 56 individual parishes in El Paso and West Texas because they are legally distinct from the diocese, Seitz said. The individual parishes that are named in the New Mexico lawsuits are now in the Las Cruces diocese, which was created in 1982.<\/p>\n
The Catholic Foundation for the Diocese of El Paso, which includes endowments that support church activities, also is a separate legal entity from the diocese and isn\u2019t affected by the bankruptcy filing, the bishop said.<\/p>\n
Seitz said the diocesan priests have been kept aware of the possibility of a bankruptcy filing, and were told Thursday that it would happen.<\/p>\n
The El Paso diocese has insurance policies, which are expected to handle the bulk of any settlements with sex abuse victims, Seitz said. Some of the older assaults came at a time when the diocese didn\u2019t carry insurance, which creates financial risks.<\/p>\n
The bankruptcy reorganization, which lawyers have said will take a year or two to complete, will have financial implications for the diocese, Seitz said. But he said they don\u2019t plan layoffs among the more than 50 diocese employees, or reductions to religious and other services provided by the diocese.<\/p>\n
\u201cAny kind of reserves that we might have been able to build up through the years, those are going to be gone. So it\u2019s going to be difficult,\u201d the bishop said.<\/p>\n
The El Paso diocese has faced previous legal claims regarding sexual abuse by priests.<\/p>\n
\u201cWe\u2019ve been dealing with these cases, but it\u2019s been like a relative trickle, maybe two a year, maybe three, and we\u2019ve been able to work to mediate with them,\u201d Seitz said. He said he can\u2019t provide the amount of settlements paid previously because of confidentiality agreements requested by victims.<\/p>\n
He said sexual abuse by priests around the world is \u201ca nightmare.\u201d<\/p>\n
\u201cIf you could imagine the most egregious swing from being a person who\u2019s called to love God and care for his people, you can\u2019t imagine a turn that would be farther from that than what\u2019s taken place in our past,\u201d Seitz said.<\/p>\n
\u201cWe acknowledge that it happened and we\u2019re mortified, and we\u2019ve been doing penance about it for a lot of years, and will continue.\u201d<\/p>\n
The El Paso diocese\u2019s annual Mass of Atonement and Hope for sex abuse victims is at 1 p.m. Saturday at St. Patrick Cathedral, 1118 N. Mesa St.<\/p>\n
Between 2004 and 2025, 37 U.S. dioceses and archdioceses sought bankruptcy protection because of clergy sex abuse litigation, according to Reilly, the law professor at Penn State University.<\/p>\n
Eleven of the previous diocesan bankruptcy filings are ongoing. The number of sex abuse victims involved in the concluded bankruptcy cases ranged from 28 to 900, according to Reilly\u2019s research. The concluded cases took between six months and six years to be completed.<\/p>\n
Additionally, four Catholic religious orders and one parish have sought bankruptcy protection because of clergy sex abuse, according to Reilly.<\/p>\n
\u201cThe federal bankruptcy law provides an extremely useful procedure for resolving, in a final and comprehensive way, exactly this type of liability problem, compared to the alternative, which (can be) decades and decades of complicated litigation,\u201d she said in an interview with El Paso Matters.<\/p>\n
In a bankruptcy reorganization, the debtor \u2013 in this case the El Paso diocese \u2013 proposes a reorganization plan to creditors. In this case, a committee of attorneys representing the sex abuse plaintiffs would represent the interests of those with lawsuits against the diocese. The debtor and creditors negotiate a reorganization, which would include a fund for payments to sex abuse victims.<\/p>\n
The diocese said it will propose in its reorganization plan a 120-day period for any outstanding claims to be made regarding abuse by clergy, employees or volunteers of the diocese.<\/p>\n
The bankruptcy judge \u2013 in this case, Craig Gargotta of El Paso \u2013 must approve any final reorganization plan.<\/p>\n
The money for the settlement trust to pay abuse victims would come from insurance companies and from diocesan funds, Reilly said.<\/p>\n
In previous diocesan bankruptcy cases, \u201cmost of the debtors have had to sell real property, and they have closed parishes, changed the way they operate,\u201d she said. Some dioceses have borrowed against trust funds they control, such as those used for maintenance of cemeteries.<\/p>\n
And dioceses have asked their parishes \u2013 even those not involved in sex abuse claims \u2013 to contribute money to the settlement fund.<\/p>\n
\u201cSo, the way Catholic dioceses operate, which is very Catholic, is we need all of the parishes to pitch in to solve this lingering liability problem. And it\u2019s kind of treated like it\u2019s our family, you know, we\u2019re all in the family together,\u201d said Reilly, who is Catholic.<\/p>\n
The reorganization plan also includes directions on how money from the settlement fund is to be dispersed to those who sued the diocese. The fund is administered by an independent trustee, who would decide the amount of payments to each creditor based on criteria established by the reorganization plan.<\/p>\n
The El Paso diocese is the first in Texas to seek bankruptcy protection.<\/p>\n
With the El Paso filing, all of the dioceses active in New Mexico during the height of the clergy sex abuse scandal from the 1950s through early 1980s \u2013 El Paso, Santa Fe and Gallup \u2013 have sought bankruptcy protection.<\/p>\n
The Las Cruces diocese was created out of the El Paso and Santa Fe dioceses by Pope John Paul II in 1982 and is a co-defendant in some of the lawsuits involving the El Paso diocese. It has not sought reorganization through the bankruptcy process.<\/p>\n
New Mexico was one of the epicenters of sex abuse by Catholic priests, in part because it was home to a religious order called Servants of the Paraclete, which provided rehabilitative services to priests from around the country. That included priests who had committed \u201csexual sins\u201d against children.<\/p>\n
Many of the priests treated at the northern New Mexico facility were allowed to return to the ministry, and many were sent to New Mexico parishes \u2013 including the El Paso diocese \u2013 where they sexually abused children entrusted to their care.<\/p>\n
\u201cIt was a perfect storm, in a way. It seems that they got to know who each other was to some degree,\u201d Seitz said of the abusive priests.<\/p>\n
One of the priests named in the pending New Mexico lawsuits is David Holley, who was treated at Servants of the Paraclete and later sentenced to 275 years in prison for sexually abusing children at his parish in Alamogordo. He died in prison in 2008.<\/p>\n
Seitz said it\u2019s important that El Paso Catholics continue to make donations to their local parishes. A part of those donations go to what is known as \u201ccathedraticum,\u201d which provides funding for administrative expenses for the diocese.<\/p>\n
\u201cAnd I know they\u2019re going to be fearful or saying, \u2018You know, we don\u2019t want it to go to a settlement,\u2019\u201d he said.<\/p>\n
\u201cI hope people understand they\u2019re part of this church and we have a responsibility to respond to these victims. None of us here have committed these crimes, but we\u2019re part of this church made up of saints and sinners,\u201d Seitz said.<\/p>\n
The bishop said the El Paso diocese hasn\u2019t had a credible claim of clergy sex abuse since 1998, which he credits to the Catholic church\u2019s efforts to improve protection of children in the wake of one of its darkest episodes. The abuse occurred at an El Paso parish and the victim came forward to police in 2016.<\/p>\n
The priest, Miguel Luna, was removed from the ministry by the diocese in 2013, according to church records. He was convicted in 2019 of 12 sex abuse charges and sentenced to 18 years in prison. Luna, now 76, is incarcerated at a state prison in Fort Stockton, Texas, and is eligible for parole in 2028, state records show.<\/p>\n
\u201cI directed the leadership of the diocese when I came (in 2013) that I wanted to get a new program for a safe environment. I wanted to find the best in the country, and I wanted our diocese to become a leader in that work. We haven\u2019t done it perfectly, and you\u2019re always learning, right? But I think we\u2019ve, we\u2019ve done pretty well,\u201d Seitz said.<\/p>\n
Reilly, the law professor at Penn State, said plaintiffs\u2019 attorneys generally don\u2019t like the bankruptcy process. But she said it can bring some benefits to victims of abuse.<\/p>\n
\u201cWhen your claim is going to be resolved in this kind of batch process, you\u2019re not going to carry the burden of proof on each element of your claim based on the trial of the evidence. Your claim is going to be validated and valued based on this agreed procedure as part of the creation and implementation of the settlement trust,\u201d she said.<\/p>\n
In a bankruptcy proceeding, victims file an anonymized proof of claim. In a lawsuit trial, they would have to testify in public about their past abuse, and be subject to cross examination by the defendant\u2019s lawyer.<\/p>\n
\u201cAnd for a lot of sex abuse claimants, the people don\u2019t want to do that, they don\u2019t want to have to sit in the courthouse and give testimony or try to recount the details of something horrible that happened to them years and years ago,\u201d Reilly said.<\/p>\n
At the end of the bankruptcy process, victims are paid a lump sum by the trustee, she said.<\/p>\n
\u201cYou have to compare what happens in bankruptcy with your alternative. And in that, I think there are reasons to think that the bankruptcy processes would be preferable,\u201d Reilly said.<\/p>\n
Seitz said he will rely on his faith as the diocese and the victims of its former priests move forward.<\/p>\n
\u201cI\u2019ve certainly been through a lot of experiences in my life, and a lot of the experiences have been hard. And I\u2019ve come to see that God is greater than any of the struggles that I\u2019ve had to face. I really do trust that the Lord will bring me and us through this.\u201d<\/p>\n
This is a developing story and will be updated.<\/p>\n","protected":false},"excerpt":{"rendered":"The El Paso Catholic Diocese, faced with potential \u201castronomical\u201d judgments in a dozen lawsuits alleging clergy sexual abuse,…\n","protected":false},"author":2,"featured_media":193651,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[138,140,139],"class_list":["post-193786","post","type-post","status-publish","format-standard","has-post-thumbnail","category-el-paso","tag-el-paso","tag-el-paso-headlines","tag-el-paso-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/193786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=193786"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/193786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/193651"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=193786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=193786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=193786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}