Catholic diocese in Montana seeks bankruptcy protection in sex abuse claims

A Roman Catholic diocese in Montana has filed for bankruptcy protection, months before facing its first trial of a civil lawsuit stemming from child sex abuse claims against its clergy, church officials and the plaintiffs' lawyers said on Friday.

The Diocese of Great Falls-Billings filed a Chapter 11 bankruptcy petition in Montana federal court as part of a negotiated settlement of dozens of "credible" sex abuse cases that date from 1950s through the 1990s, lawyers for 72 victims and the diocese said in separate statements.

At least 15 other U.S. Catholic districts and religious orders have been driven to seek Chapter 11 protection by a sex abuse scandal that erupted in 2002. Montana’s other Catholic diocese in Helena, the state capital, filed for bankruptcy in 2012 to settle cases stemming from similar accusations.

If granted by a judge, the Great Falls bankruptcy would allow the diocese and its insurer to contribute to a fund that would be set aside to compensate victims, the diocese said in a statement.

The total sum paid to victims will be determined after both sides negotiate settlement terms.

Timothy Kosnoff, a Seattle lawyer who has represented victims in both of the Montana diocesan cases, told Reuters that bankruptcy is the only realistic mechanism to settle the claims.

However, he said obstacles remained to reaching a resolution, including the insurance carrier's resistance to pay fair compensation to the victims.

"Let there be no illusions. Despite this sensible step forward, speedy resolution is unlikely and the future of the diocese remains clouded," he said.

A lawyer for 34 of the victims, Vito de la Cruz, said Friday’s bankruptcy will allow his clients to receive “a measure of justice” in a reasonable amount of time rather than the years it would take to try each case separately.

Great Falls Bishop Michael Warfel said he felt "profound sorrow" over the abuse and offered "sincere apologies" to the victims.

(Editing by Steve Gorman)