Archdiocese of San Francisco
Message from Most Reverend Salvatore J. Cordileone
Archbishop of San Francisco
Dear Chancery Employees:
As promised in our last communication, we are letting you know that the Archdiocese of San Francisco today filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code to manage and resolve the more than 500 lawsuits alleging child sexual abuse brought against the Archdiocese under California Assembly Bill 218.
The Chapter 11 filing was ultimately deemed the best path forward for both managing all claims in a timely manner with fair and equitable compensation and allowing us to continue our vital ministries to the communities that rely on our services and charity.
We realize the difficulties of the past few years. The pandemic, the increased homeless population, and crime and unrest in our communities has put a strain on our finances and our employees and volunteers, and we appreciate your ongoing diligent work for the Archdiocese and all its mission activities. All these factors in addition to the anticipated expenses related to the litigation resulting from the sexual abuse claims, require a managed restructuring.
As a reminder, The Roman Catholic Archbishop of San Francisco, a Corporation Sole, is the only legal entity included in the filing. Our schools and parishes are not included in the filing. The Real Property Support Corporation, Capital Asset Support Corporation, Catholic cemeteries, St Patrick’s Seminary & University, and Catholic Charities are also not included in the filing and will continue to operate as usual.
During this process, daily operations at the Chancery will continue without interruption. All of our programs and ministries will continue, and all employees will be paid their normal wages. Benefit programs will continue, uninterrupted. The Archdiocese believes its current and future liquidity will be sufficient to fund operations and ministries during the restructuring process and beyond.
The only material difference in our operations will be the way we pay for and order merchandise and services. Without Court authorization, the law prohibits us from paying anyone, including suppliers, for goods purchased and services provided prior to today’s filing date until after the Archdiocese emerges from Chapter 11. In the meantime, we will pay suppliers on a timely basis for anything we purchase after today. This legal provision is a strong incentive for suppliers to continue to engage with us, which should ensure that there will be no interruption in the flow of goods and services necessary to conduct our missions and ministries.
We will work diligently with all survivors, creditors, and ministries to maintain open communication while we work toward our goal of completing a settlement and finalizing a restructuring plan that includes a final resolution for survivors.
We have included a Frequently Asked Questions document to provide specific information for employees. You may also find information on the Archdiocese’s claim agent’s website, at https://omniagentsolutions.com/RCASF. My letter to the faithful of the Archdiocese and a general FAQ can be found on our website.
More than two dozen U.S. dioceses have filed for Chapter 11. For those dioceses that have resolved their bankruptcies, all have been able to successfully emerge and continue their ministries and support their communities.
I encourage all of you to join me in prayer and fasting for the survivors of abuse and for the mission of our Archdiocese. May God bless you and your families as we continue focusing on all our missions, charitable works, and religious education throughout the communities we serve.
Sincerely yours in our Lord,
Most Rev. Salvatore J. Cordileone
CHANCERY EMPLOYEE FREQUENTLY ASKED QUESTION
Yes. Employees of companies and non-profit organizations that file to restructure under Chapter 11 of the Bankruptcy Code continue to work and receive their wages and benefits during the process and beyond.
The bankruptcy process typically includes filing motions with the court requesting that the Archdiocese be permitted to continue operations as usual, including paying employee wages, benefits, and paid time off. The Archdiocese has requested this authorization from the court and expects to receive approval.
The Archdiocese will honor all accrued vacation and other paid time off for employees. The Bankruptcy Code does have limits of $15,150 per employee in pre-bankruptcy vacation balances that can be used by employees during the bankruptcy period. The $15,150 cap is calculated using a 180-day period prior to a bankruptcy filing date. If an employee’s vacation time exceeds this limit, the Archdiocese would file additional motions to the court to cover vacation balances above the limit. Vacation time would be earned at the same rate during a bankruptcy period, and vacation and other paid time off can be taken at any time that is approved by your manager.
No. A Chapter 11 filing allows the Archdiocese to continue to operate in the ordinary course of its business. The Archdiocese does not plan to change benefits that exist prior to the filing. During bankruptcy, retired employees would continue to receive their pension checks according to the regular schedule.
The assets in the 403(b) plan are held in trust and must be used for their assigned purposes and cannot be used to fund abuse settlements.
There should be no changes to day-to-day activities at the Chancery.
We are counting on employees to stay focused on their spiritual, educational, and cultural missions just as they have in the past.
Every paycheck issued or direct deposit made by the Archdiocese should be honored.
A Chapter 11 filing should not have any direct effect on jobs in the Archdiocese. Employees of companies and non-profit organizations that file to restructure under Chapter 11 of the Bankruptcy Code continue to work and receive their wages and benefits during the process and beyond. As is the case before the filing, employment decisions will continue to be based on needs, performance, and overall goals of archdiocesan ministries.
Donations made in the offertory and to a direct appeal and/or project cannot be used for payments other than specified with the original donation.
Employees can help by continuing their excellent work on behalf of our mission and ministries, as they have in the past.
We will keep you informed about our progress via email, and we will provide updates to our frequently asked questions on the Archdiocesan website.