Diocese of Wilmington Pays $77.4 Million to 146 Clergy Abuse Survivors in Bankruptcy Settlement

In October 2009, the Catholic Diocese of Wilmington filed for Chapter 11 bankruptcy protection days before a series of scheduled trials on child sexual abuse claims, halting proceedings and forcing survivors into federal court. The diocese became the seventh in the United States to seek bankruptcy shelter in the face of mounting clergy abuse litigation. Abuse claims in the case stretched back to the early 1960s and involved priests serving parishes across Delaware and Maryland's Eastern Shore.

Delaware's two-year civil lookback window, enacted earlier, had revived time-barred claims and opened the courthouse to survivors who had previously had no legal recourse. Roughly 146 claimants filed proofs of claim in the bankruptcy. Thomas Crumplar of Jacobs and Crumplar served as co-counsel for a portion of the survivors alongside The Neuberger Firm, which represented 99 of the claimants. Together they pressed the case through months of negotiations inside bankruptcy court before Judge Christopher Sontchi.

A December 2010 jury verdict of $30 million in favor of one survivor in the case of Vai v. DeLuca, involving former priest Francis DeLuca, added significant pressure to the negotiations. Within weeks of that verdict, the parties reached a global resolution.

On February 3, 2011, the Diocese agreed to establish a trust of $77,425,000 to be distributed among the 146 survivors, averaging roughly $530,000 per claimant. Beyond the money, the settlement required the Diocese to open its secret archives, records dating to the diocese's founding in 1868, some written in Latin. Crumplar noted the archive collection runs to thousands of documents, including the Bishop's diary. The settlement also mandated the diocese adopt procedures aimed at preventing future abuse.

Bishop W. Francis Malooly stated the agreement fairly compensated survivors while honoring obligations to other creditors. The Diocese subsequently laid off 22 employees and ceased publication of its weekly newspaper. Attorneys for the survivors announced plans to make unredacted church documents publicly available. Separately, counsel anticipated pursuing additional claims against three religious orders operating in Delaware, with estimated insurance coverage of at least $80 million.