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Harrisburg Diocese files for reorganization under Chapter 11 of Bankruptcy Code


Bishop Ronald W. Gainer of Harrisburg, Pa., addresses members of the media at a news conference in Harrisburg Feb. 19, 2020, to announce that the diocese has filed for bankruptcy and reorganization under Chapter 11 of the U.S. Bankruptcy Code. (CNS photo/Chris Heisey, The Catholic Witness)

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HARRISBURG, Pa. (CNS) -- Bishop Ronald W. Gainer said Feb. 19 the restructuring process provided for by filing for Chapter 11 bankruptcy protection will allow the Diocese of Harrisburg to lay a foundation to build upon and secure its future.

"Our diocese has had to come to terms with the harsh reality that we no longer have the funds to meet our current obligations," the bishop said at a news conference to announce the diocese has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.

He said the decision was reached "after much prayer and discernment, countless discussion with our accountants and attorneys, in consultation with, and approval from, our diocesan finance council and college of consultors."

"A culmination of events," he said, led to the decision, "primarily a steady decline in church attendance and the reality of dwindling church revenues."

Bishop Gainer explained reorganization will allow the diocese to continue its ministry work, while also equitably compensating its creditors.

"Over the past few years, our diocese has been forced to confront our horrific past regarding clergy sexual abuse. Today, we are facing some difficult financial realities. Despite making every attempt to scale back operations and reduce overhead, we are currently unable to meet our financial obligations," said Bishop Gainer.

He went on to explain that for several years before receiving a subpoena from the Pennsylvania grand jury in 2016 for documents related to sex abuse claims, "the diocese's financial situation was in a challenging condition."

The grand jury undertook a monthslong investigation into alleged abuse in the dioceses of Pittsburgh, Allentown, Scranton, Erie, Harrisburg and Greensburg, Pennsylvania. It released its report Aug. 14, 2018; it covered a 70-year period starting in 1947.

"Responding to that investigation forced us to incur very heavy legal costs, which has had harsh financial consequences for the diocese. Those costs were not something the diocese was able to plan for in our budget, which greatly limited the options available to us to correct the preexisting financial trend," said Bishop Gainer.

The diocese's current financial situation, "coupled with changes in the law both here and in New Jersey, where we are already named in one lawsuit and where we anticipate more to follow, left us with no other path forward to ensure the future of our diocese."

The changes in the law he referenced are namely the lifting for a period of time the statute of limitations on filing abuse claims.

The diocese's Survivor Compensation Program, Bishop Gainer said, has helped 111 survivors of clergy child sexual abuse, or 96% of those who participated in the program. But despite that success, he said, "we already are in receipt of half a dozen new lawsuits, any one of which could severely cripple the diocese."

"As bishop, I must ensure the diocese's core mission is upheld, which is to remain focused on Christ's mandate to preach, teach, sanctify and to serve those in need," the bishop said. "We must work to bring the Chapter 11 process to a conclusion, as soon as is reasonably possible and in a way that allows us to be present to the community, as we have been for the past 152 years."

He stressed that this action does not include the parishes and schools of the diocese as they are considered separate legal entities.

"When I think about our current situation and the future, I cannot help but think about what it will take to rebuild and strengthen our diocese as we move forward. You cannot build anything without a strong and solid foundation," Bishop Gainer said.

He referenced Chapter 6, Verse 48 of St. Luke's Gospel: "He is like a man building a house, who dug deeply and laid the foundation on the rock; when the flood came, the rivers burst against that house and could not shake it, because it had been well built."

"Our diocese currently lacks that strong foundation; however, at the end of this difficult process, we will again have a solid foundation to build upon," said Bishop Gainer.

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Editor's Note: The Harrisburg Diocese launched a special page on its website, www.hbgdiocese.org, with more details about the reorganization procedure and a Q-and-A section.

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