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Federal judge rejects the Oakland Diocese’s bankruptcy plan
Judge William J. Lafferty said the diocese failed to justify special treatment and disputed valuations in a plan tied to $160 million to $198 million in claims.
On Oct 2, Judge William Lafferty rejected the Oakland Diocese's bankruptcy plan, which aimed to resolve nearly 330 sexual abuse claims.
Three years ago, the Oakland Diocese filed for bankruptcy due to declining participation and an ongoing financial crisis linked to sexual abuse cases dating between 1960 and 1990.
Facing debts between $160 million and $198 million, the diocese proposed selling 13 churches—7 in Oakland—but a nine-member committee appointed by the United States Trustee rejected the plan.
Bishop Michael Barber called the Court's decision a "setback," affirming the Church remains committed to providing fair treatment for survivors serving 500,000 faithful Catholics.
Noting the Plan's flaws arose from "failures of proof," Lafferty indicated an alternative proposal involving different contributions from the Debtor remains realizable.