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America's poorest diocese set to file for Chapter 11 bankruptcy amid sex abuse claims

The Roman Catholic Diocese of Gallup, New Mexico, plans to file for Chapter 11 bankruptcy this month to cope with mounting costs of litigation arising from claims of child sexual abuse by members of its clergy, the church confirmed on Tuesday.

The Gallup Diocese, which includes several Native American reservations, would become the ninth U.S. diocese or archdiocese to file for bankruptcy protection since 2004 in financial fallout from child molestation cases against the church.

Child sex abuse litigation has cost the U.S. Catholic Church some $3 billion in settlements in the two decades since the ongoing scandal erupted with a series of molestation cases uncovered in Boston in 1992.

In a letter read to parishioners over the weekend, Gallup Bishop James S. Wall denied that the diocese was filing for Chapter 11 "to avoid responsibility for what happened or to hide anything."

"I firmly believe that the process of Chapter 11 is the best and only way that will allow us to work constructively with all those who suffered from sexual abuse," wrote Wall, who became bishop in 2009. "Those who have been abused deserve the church's respect, compassion and love."

Covering 53 parishes in a geographic area of more than 55,000 square miles, Gallup ranks as the poorest diocese in the United States, according to the diocese spokesman, the Rev. Tim Farrell.

Farrell said he could not put a dollar figure on how much potential liability the diocese faced from the 15 to 20 sex abuse cases pending against it, "but it's more than we have."

Some of the cases stem from alleged incidents that occurred in areas that are no longer part of the diocese, and some that date back 50 to 60 years, he said.

Robert Pastor, a Phoenix attorney who represents plaintiffs in 13 sex abuse cases against diocese clergy, said the bankruptcy filing would delay litigation of the claims.

"The bishop has done what we see all the other bishops do - they run to bankruptcy perhaps seeking financial protection but more importantly protection from the discovery process," Pastor said.

He noted that Bishop Wall was due to be deposed in an abuse case on September 18, which could be delayed if the bankruptcy is filed before then. Farrell said the filing may not occur until the end of the month.