Franciscan Friars of California request additional four months to file reorganization plan as they pursue novel mediation approach with abuse survivors
The Franciscan Friars of California has requested additional time to maintain exclusive control over its bankruptcy reorganization process as it works to address claims from nearly 100 sexual abuse survivors. In a motion filed last week, the religious organization asked the court to extend key deadlines by four months, citing case complexity and ongoing mediation efforts.
The Oakland-based Catholic organization filed its third motion on March 26 to extend the exclusivity periods in its Chapter 11 bankruptcy case, seeking to push the deadline for filing a reorganization plan to August 22, 2025, with a corresponding extension for obtaining creditor acceptances to October 22, 2025.
According to documents filed with the U.S. Bankruptcy Court for the Northern District of California, the organization is pursuing what it describes as a "novel approach" in religious sexual abuse bankruptcy cases - proposing to lift the automatic stay protection to allow several "test cases" to proceed in state court.
"Lifting the stay for certain test cases to go forward is a novel approach in sexual-abuse religious chapter 11 cases that is expected to incentivize the mediating parties to come to an agreement expeditiously," the organization stated in its filing, noting that while these cases would be allowed to proceed to judgment, any resulting awards would not be enforced outside the bankruptcy process.
The Franciscan Friars initially filed for Chapter 11 protection on December 31, 2023, specifically to address sexual abuse claims. Court documents reveal the organization faces 94 pending sexual abuse cases and approximately 800 creditors overall.
"FFCI filed this Bankruptcy Case to reorganize its financial affairs pursuant to a plan of reorganization that will, among other things and within the limits of its financial capabilities, fairly, justly, and equitably compensate survivors of sexual abuse by clergy or others associated with FFCI and bring healing to survivors, parishioners and others affected by past acts of sexual abuse," the motion states.
A key development in the case came on March 12, when the debtor and the Official Committee of Unsecured Creditors jointly filed a motion for court-ordered mediation. If approved at a hearing scheduled for April 1, the mediation would include the Franciscan Friars, the creditors' committee, the organization's insurers, and affiliated entities. The first mediation session is already scheduled for May 14, with potential follow-up sessions extending through July.
The organization argues that several factors justify the extension request, including the case's complexity, the need for time to negotiate with multiple parties, and progress toward a potential resolution. The motion highlights that in similar religious bankruptcy cases involving sexual abuse claims, "insurance companies and non-debtors have contributed to a fund to pay survivors and creditors" following extensive negotiations.
Robert G. Harris of Binder Malter Harris & Rome-Banks LLP, lead attorney for the Franciscans, noted in the filing that the organization is "making good progress toward a reorganization" and is paying its post-petition obligations as they become due.
Judge William J. Lafferty III will consider the motion at a hearing set for April 16 in Oakland. If granted, this would be the third extension of the exclusivity periods in the case.
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Link to full document: Debtor's Third Motion to Extend Exclusivity Periods for Filing Plan and Disclosure Statement and Obtaining Acceptances