Survivors group urges S.F. Archdiocese to sell off real estate to pay abuse victims

A group of abuse survivors is challenging the Archdiocese of San Francisco’s decision to declare bankruptcy, arguing it could instead sell parts of its multibillion-dollar real estate portfolio to compensate victims. 

More than 500 civil lawsuits have been filed against the archdiocese, accusing hundreds of religious leaders of sexual abuse. The archdiocese filed for Chapter 11 bankruptcy in late August, claiming it was necessary to manage litigation and compensation for each of the cases.

In a letter sent to Archbishop Salvatore Cordileone Tuesday, SNAP — the Survivors Network of those Abused by Priests — argued the archdiocese should instead be utilizing its multibillion-dollar real estate portfolio to compensate victims.  

According to SNAP’s calculations, the archdiocese possesses at least $5.9 billion in real estate properties from the Peninsula to Marin County. The group called the number a conservative estimate, given that it doesn’t include any income from undisclosed leases or parking fees.

A representative for the archdiocese did not respond to a request for comment on the group’s valuation. 

SNAP claimed the archdiocese could sell the vacant land on just two of its properties — St. Vincent’s School for Boys in San Rafael and St. Patrick’s Seminary in Menlo Park — to generate $500 million-$1 billion for victims’ compensation. 

Alternatively, the group proposed selling the archdiocese’s eight unstaffed parishes valued in total at more than $200 million.

“That you instead opted for bankruptcy is disheartening, particularly since this legal maneuver will prevent people who are not yet ready to come forward from receiving restitution in the future, including children,” several SNAP leaders wrote. 

The challenge in complex bankruptcy cases involving the church is determining who owns a particular piece of property, bankruptcy law experts told the Chronicle. Sometimes, property once owned by the diocese has been transferred to a local parish, which could keep it out of the reach of creditors.

“There’s a difference between the legal entity of the diocese that filed bankruptcy and the parishes and schools,” said Pamela Foohey, a professor of law at the Cardozo School of Law in New York and an expert on church bankruptcies. 

If the diocese owns a big building and a cemetery next to it, for example, then those should be included in its assets, Foohey said. But, according to other cases involving church assets, “if a piece of property is in a separate trust that they don’t actually own, (the diocese) does not include that. It does not include any of the parishes that the diocese oversees.”

In San Francisco’s case, the Chapter 11 bankruptcy filing does not include the archdiocese’s 88 parishes, several high schools and all of its Catholic cemeteries.

This isn’t the first time that the archdiocese has been involved in a dispute over ownership of property. In 2009, San Francisco’s city assessor-recorder Phil Ting, now a state Assembly member, alleged the Archdiocese of San Francisco shifted the ownership of some of its assets to a new nonprofit organization in order to shield the properties from being seized or sold for potential lawsuit payouts. Ting alleged the church refused to pay $14.4 million for transferring 232 properties. 

The church is facing similar pressure elsewhere in California.

The Roman Catholic Diocese of San Diego is facing a lawsuit that accuses it of transferring the ownership of nearly 300 properties worth $453 million in anticipation of sexual abuse lawsuits, the San Diego Union Tribune reported. The lawsuit was filed after the San Diego diocese announced it was considering filing for bankruptcy after being sued more than 400 times. 

On top of the value of its real estate, SNAP says the Archdiocese of San Francisco could be using the money it generates from school tuition, endowment funds and more to pay for the litigation.

The archdiocese said in filings it earned $55 million in revenue for the fiscal year that ended June 30, 2023, and has paid more than $70 million over the past 20 years to compensate victims of child sexual abuse. 

In those filings, Chief Financial Officer Joseph Passarello claimed the archdiocese’s decision to file for bankruptcy was not motivated by the desire to hide the truth or avoid responsibility, but because it had “neither the financial means nor the practical ability” to litigate the more than 500 cases filed against it. 

Often in these types of complex bankruptcy cases, it could be a long time before victims will receive any compensation.

“How long it takes depends on a lot of factors,” said Marie Reilly, a Penn State Law professor and expert on church bankruptcies. “But years is not unreasonable” to project as an estimate, she said.

SNAP argued its research proved the bankruptcy was not motivated by a lack of assets, but was designed to maintain secrecy about what exactly happened and who was aware of the decades of alleged abuse as it was happening.

“Releasing the information contained in your secret files, developing and sharing a list of San Francisco abusers, as well as using the Archdiocese’s massive portfolio to properly compensate the children of God harmed by corrupt shepherds, would do much to help victims heal,” the group wrote.