FRESNO, Calif. – Representatives of the Catholic Diocese of Fresno recently spent hours answering questions under oath during one of the first public hearings in federal bankruptcy court.
The conversation illuminated some of the reasons for why the diocese’s bankruptcy declaration was delayed for months. And while the diocese’s leaders maintain their commitment to justice for victims of sexual abuse, a few moments of tension foreshadow the challenging process ahead to sort out the scores of abuse claims filed in recent years against the diocese.
Known as a “meeting of creditors,” the virtual hearing held Aug. 11 was an opportunity for Diocese of Fresno Bishop Joseph Brennan and other representatives to speak about the diocese’s finances under oath.
They answered questions from a lawyer for the U.S. Trustees Program, a representative of the creditors committee and attorneys representing those who allege sexual abuse. Creditors are people or entities that claim the diocese owes them money, including plaintiffs who have filed lawsuits against the diocese.
The meeting is a required part of the federal court proceedings following the diocese’s declaration of chapter 11 bankruptcy in July. The voluntary filing, which had been anticipated for more than a year, was made in response to 153 lawsuits claiming sexual abuse of children by clergy employed by the diocese.
In a statement released at that time, Brennan said the bankruptcy filing was needed to “address the suffering that victims of the clergy sexual abuse endure,” and that the diocese was confronting the allegations “with diligence and care.”
Diocese faced financial roadblocks
Most questions in the four-hour hearing dealt with the diocese’s finances, including its assets, workforce, insurance policies and bank accounts.
Leaders also faced questions about why the diocese had only filed for bankruptcy in July of this year, after Brennan had initially signaled the declaration would come in August 2024. The delay outraged many advocates for those alleging sexual abuse.
Brennan explained the delay was frustrating for those in the diocese, as well. He said the diocese ran into “unforeseen issues,” including the closure of a bank account managed by Wells Fargo. For a time, he said the diocese needed to manage its payroll using pen and paper for a time. Three consecutive controllers from its accounting department also left.
Brennan said the process was “long, painful and difficult,” and that leaders didn’t want to declare bankruptcy until they were confident they could comply with rigorous reporting standards required by the federal government.
He also pointed out the diocese needed bankruptcy authorization from the Holy See, though he didn’t say how long that authorization took to obtain.
Conflict arose over sexual abuse allegations
Brennan said the diocese’s process for responding to sexual abuse accusations is relatively standard for dioceses across the country.
“First of all, law enforcement is notified,” he said, and in some cases, child protective services are called in.
Brennan said a priest is immediately placed on administrative leave and the investigative process begins. The investigation involves a civil and church-level investigation.
The 153 lawsuits the diocese is currently facing were largely filed from 2020-2022, in a narrow window in which a state law extended the statute of limitations for people who claim they were sexually abused as children. Most of the incidents alleged in the lawsuits occurred decades ago, and most of the clergy involved have either died or retired.
Early on during the call held this month, diocese accountant Cynthia Martin had said that no accused priests are still working for the diocese. But later, diocese leaders amended that to say that no priest included on the diocese’s “credibly accused” list currently works for the diocese. Brennan stated that five additional priests have been accused but are not on the “credibly accused” list.
Jeff Anderson, an attorney representing plaintiffs in alleged sexual abuse cases, claimed that at least one priest sued for abuse is still employed by the diocese – and is still working with children.
“We're not going to go into individual cases or individual priests at this point,” responded Hagop Bedoyan, a bankruptcy lawyer working with the diocese.
At another time in the call, Brennan stated that priests who have been accused of abuse and have been placed on leave cannot be guaranteed to have no access to children at all – especially children in their own family.
Andrew Glasnovich, a lawyer representing the creditors committee asked why accused priests could hypothetically be allowed any access to children while under investigation.
“I don't know how fair it is for someone to ask me to act on unsubstantiated claims,” Brennan responded.
“We'd be willing to look at any information you have, but…we're not guilty until we're proven innocent,” added attorney Bedoyan, who also offered to have a conversation with Glasnovich off the record.
Glasnovich said he appreciated the offer, but said, “it's troubling” that the parties could not agree on “how best to protect children," before moving to the next question.
Sexual abuse claims against the diocese are set to be resolved in federal bankruptcy court. The entire proceeding – which will involve the creation of a formal reorganization plan, a claims management process, and adjudication of each case alleging abuse – could take years to resolve.
