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Photo: Mission San José in Fremont, California. First parish in the Oakland diocese; via Lou Huang on Wikipedia.
The Diocese of Oakland, California, is once again in court seeking to dismiss its Chapter 11 bankruptcy case even while talks continue with abuse survivors and insurance companies. The diocese says it has exhausted its funds for legal fees in bankruptcy and cannot continue to sustain the process under current conditions. Bloomberg Law reported.
The diocese will return to mediation with a committee representing nearly 350 child sex abuse claimants and its insurers. Previously, the diocese had proposed a reorganization plan filed in March 2025, known as its Third Amended Plan, which aimed both to compensate survivors fairly and reorganize the diocese financially. In that plan, the diocese declared it would contribute $115 million in cash, schools (via the Roman Catholic Welfare Corporation) would contribute about $28.5 million depending on release agreements, and it would assign its rights under insurance policies to a trust for survivors.
The plan, filed in November 2024, proposed creating a Survivors’ Trust to settle the Oakland Diocese sexual abuse claims for an estimated between $160 million and $198 million or more, combining cash, real estate, insurance, and possibly other contributions, according to the National Catholic Reporter.
But survivors’ attorneys have raised serious objections. They allege the plan undervalues the diocese’s real estate portfolio, claims the diocese transferred around $106 million into a separate parochial fund prior to its bankruptcy filing to shield assets, and accuse the church of attempting to force a plan without full agreement from survivors. The diocese has responded that its estimates are based on realistic valuations and insists it remains committed to mediation and fulfilling obligations to survivors, KTVU FOX 2 San Francisco reported.
This dispute comes at a pivotal moment: if the diocese’s motion to dismiss the bankruptcy is granted, the case could return to court or survivors’ lawsuits may resume in state courts, depending on how release agreements, approvals, and legal protections are structured. As of now, no final agreement has been reached.
Clarity in this case is crucial. Dismissing the bankruptcy would alter the legal route for survivors: whether they must litigate individual lawsuits, possibly with less guarantee of consistent compensation than under a trust. Asset valuations, insurance obligations, and how much survivors are allowed to release or forgo in exchange for settlements all hinge on the final approved plan. The difference can be tens or hundreds of thousands of dollars per survivor, depending on how the plan treats real estate, insurance, and other diocesan assets. It also affects whether disclosure and transparency will be enforced or limited.|
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