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This presentation explains the law that governs a Catholic organization’s liability to a person who was sexually abused as a child by an actor within that organization’s control. It explains how sexual abuse claimants become creditors with enforcement rights against the organization and its property. When the number of claimants exceeds the organization’s practical and financial capacity to manage on a case-by-case basis—the so-called “mass tort” problem—the potential liability puts the organization’s mission and existence in peril. Bankruptcy is an attractive option through which to negotiate a comprehensive and final resolution of that liability while preserving sufficient resources to survive.


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