Diocese of San Diego: March 2026 Chapter 11 Rulings

Diocese of San Diego: March 2026 Chapter 11 Rulings


Debtor	The Roman Catholic Bishop of San Diego
Court	U.S. Bankruptcy Court, Southern District of California
Case Number	24-02202
Petition Date	June 17, 2024
Judge	Hon. Christopher B. Latham
Claims Bar Date	February 3, 2025

Case Snapshot

Filing Background and AB 218 Claims Exposure

The debtor is a California corporation sole that serves the Diocese of San Diego across Imperial and San Diego Counties. The First Day Declaration described a diocesan ecosystem that includes parishes and affiliated entities with distinct governance and financial arrangements.

Cardinal McElroy announced the filing in a June 13, 2024 letter to parishioners and clergy, stating that the diocese had spent a year in substantive negotiations with attorneys representing abuse survivors before concluding that formal bankruptcy was necessary. The diocese framed chapter 11 as a mechanism to achieve equity among differing survivor claims while establishing a fund for future claimants.

AB 218 and claim volume. California's AB 218 lifted the statute of limitations and gave survivors three years to file sexual abuse claims against institutions. The diocese reported receiving approximately 400 lawsuits since the window opened, with more than 60% involving incidents that occurred more than 50 years ago. Kevin Eckery, a diocese spokesperson, stated that settling the current claims at the same rate as the 2007 settlement would cost more than $550 million. The diocese is at least the thirteenth Catholic diocese to file for chapter 11 in the wake of state statute-of-limitations revivals, following California filings by the dioceses of Santa Rosa, Oakland, San Francisco, and Sacramento.

2007 precedent. The diocese's first bankruptcy in 2007 ended when it settled 144 claims for $198 million and moved to dismiss the case. U.S. Bankruptcy Judge Louise DeCarl Adler held a hearing on the dismissal request and stated that the diocese's description of available assets was "disingenuous," noting that ample non-essential property existed for liquidation without threatening the church's mission. Judge DeCarl Adler warned that chapter 11 "is not supposed to be a vehicle or a method to hammer down on the claims of the abused."

Survivor and advocate positions. Attorney Irwin Zalkin of The Zalkin Law Firm, who serves as court-appointed liaison counsel for the 457 survivors, stated that Catholic dioceses and their insurers have adopted a national strategy to use chapter 11 to reduce survivor compensation and deprive survivors of their right to trial. SNAP, the Survivors Network of those Abused by Priests, described the filing as potentially protecting predators and reducing survivors to "transactional paperwork."

Parish and school impact. The diocese stated that parishes, parochial schools, and high schools are not filing for bankruptcy. However, both parishes and high schools will likely contribute money or other assets to any eventual bankruptcy plan in order to receive a release from their own liability for current and unknown claims.

Mediation Framework and Progress

The court entered an order approving a mediation stipulation in August 2024, appointing co-mediators and referring the parties to a structured mediation process. The mediation stipulation covered a broad set of issues: funding contributions by the debtor and non-debtor entities, insurance and indemnity disputes, avoidable-transfer questions, potential trust and channeling-injunction architecture, estate-property versus trust-property disputes, and non-monetary abuse-prevention terms.

Session timeline. The Eighth Chapter 11 Status Report filed on January 13, 2026 reported that the parties had completed in-person mediation sessions on September 11, October 28, and December 10, 2025, with additional sessions scheduled for March 9 and March 19, 2026. A January 13, 2026 session did not proceed because the mediators determined it would be more productive to wait until after the February 11, 2026 hearing on the claim-objection and committee-participation disputes.

Catholic Mutual's role. Catholic Mutual, the diocese's insurer, has participated in the mediation and in the contested claim-objection proceedings. The diocese has indicated that insurance coverage is available and will contribute to the payment of abuse claims, though the amount remains undetermined.

Claims Bar Date and Survivor Confidentiality Protocols

The bar date order set February 3, 2025 as the deadline for general claims, survivor claims, and governmental claims. The order required use of a confidential survivor proof-of-claim form, routed those forms through Donlin Recano rather than the public court docket, and imposed confidentiality and access restrictions around survivor submissions.

Notice program. The bar date order approved a broad notice program that included direct service, publication notice, website and social-media postings, and parish bulletin or flyer distribution.

Compliance. The January 2026 status report stated that only eight abuse claimants had failed to submit the required voluntary supplemental questionnaire by the February 3, 2025 deadline, indicating substantial compliance across the 457-claim pool.

March 2026 Rulings on Claim Objections

Two March 4, 2026 orders defined the procedural boundaries for how the case will handle abuse-claim objections going forward.

Abstention and stay motion. The court granted in part and denied in part the committee-and-claimant motion seeking abstention from or a stay of claim objections. The court declined to abstain outright but held two categories of objections in abeyance: statute-of-limitations objections and objections tied to abuse by perpetrators accused for the first time. The court allowed the debtor and Catholic Mutual to continue litigating nine threshold objection categories that the court viewed as procedural or otherwise within its authority to hear. The order also contemplated a further scheduling order to reset deadlines for the objections the court will hear.

Committee participation. In a separate order, the court granted in part and denied in part Catholic Mutual's motion to bar the Official Committee of Unsecured Creditors from participating in the claim-objection process. The order bars the committee from filing oppositions to individual claim objections and from providing individual creditors or their counsel with work product, research, templates, evaluations, or similar opposition support. The court did not exclude the committee from broader case-wide participation, and expressly left room for it to pursue motions or positions directed to all unsecured creditors. The court declined to impose a blanket prospective fee disallowance, leaving fee disputes to the normal section 330 process.

The two orders allow nine threshold objection categories to proceed in bankruptcy court while holding statute-of-limitations and first-time-perpetrator objections in abeyance. Global mediation remains on track with sessions scheduled for March 9 and March 19, 2026.

Targeted Settlements and Sealing Practice

On March 2, 2026, the debtor filed an ex parte motion seeking authority to file settlement and release papers for 37 claimants under seal. The motion stated that the settlements would resolve claims held by abuse claimants who received $75,000 settlement offers from Catholic Mutual in connection with claims that had become subject to objections by the debtor or Catholic Mutual. At those amounts, the 37 settlements represent ~$2.775 million in proposed settlement consideration.

The debtor stated that sealing was required because the settlement papers contain confidential personal information covered by the existing confidentiality order for abuse-claimant information. No plan of reorganization has been filed.

Exclusivity and Procedural Posture

The debtor previously sought to extend exclusivity by 120 days, which would move plan-filing exclusivity from June 12, 2025 to October 10, 2025 and confirmation exclusivity from August 13, 2025 to December 11, 2025. The debtor cited the case's complexity, the mediation posture, and the need to resolve claim-validation and insurance issues.

Removal deadline. The January 2026 status report stated that the deadline to remove civil actions stood at March 9, 2026 and that the debtor expected to seek another extension. The docket reflects a fourth motion to extend that removal deadline filed on March 6, 2026, indicating that removal timing remains an active procedural issue as mediation continues.

Professional Fees and Administrative Costs

The February 2026 fee-application round covered four debtor-side professionals and the fee examiner.

Debtor-side professionals. Gordon Rees Scully Mansukhani, as debtor's attorney, sought $711,338.50 in fees and $2,101.07 in expenses for October 2025 through January 2026. GlassRatner Advisory & Capital Group, as financial advisor, sought $263,335.00 in fees and $4,473.50 in expenses for the same period, with four prior interim awards totaling more than $797,000. Greene & Roberts LLP, as special counsel, sought $263,404.50 in fees and $6,154.33 in expenses. Blank Rome LLP, as special counsel, sought $46,879.50 in fees and $3,646.93 in expenses.

Fee examiner. David M. Klauder and Bielli & Klauder filed a third interim fee application seeking $78,000.00 in flat-fee compensation for October 2025 through January 2026, with $156,000.00 already approved and paid on an interim basis.

Cash Management and Diocesan Operations

The Cash Management Declaration filed at the outset of the case mapped a multi-account system for payroll, insurance, reserves, special collections, and collateralized accounts, including workers' compensation collateral and credit-card collateral. The declaration also referenced a $1.47 million inflow tied to the sale of the Cardinal's house into annuity or pension-related accounts.

The diocese stated that parishes, Catholic Charities, and schools would continue operating during the bankruptcy. Parish and school funds deposited in CAPS (Catholic Account for Parishes and Schools) belong to the respective parishes and schools, not the diocese, though those entities will likely contribute to any eventual plan settlement.

Frequently Asked Questions

Who is the claims agent for the Diocese of San Diego bankruptcy?

Donlin Recano serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest. The bar date order routed confidential survivor proof-of-claim forms through Donlin Recano rather than the public court docket.

What is the claims bar date?

The court set February 3, 2025 as the bar date for general claims, survivor claims, and governmental claims, as established in the bar date order entered in November 2024.

Is there a confirmed plan of reorganization?

No plan of reorganization has been filed or confirmed as of March 2026. The case remains in active mediation, with additional sessions scheduled for March 9 and March 19, 2026.

Are parishes and schools included in the bankruptcy?

Parishes, parochial schools, and high schools did not file for bankruptcy. However, the diocese has stated that parishes and high schools will likely contribute to any eventual settlement to receive a release from their own liability.

For additional chapter 11 bankruptcy coverage and case tracking, visit the ElevenFlo bankruptcy blog.