Oakland Diocese Loses Bid to Delay Attorney Fee Payments

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The Diocese of Oakland, California failed to convince a bankruptcy judge to defer payment of legal fees until the end of its Chapter 11 bankruptcy proceeding, which has been stalled for months. The diocese's request to amend its interim compensation procedures to include a 100% monthly fee holdback, which would have paused payments for lawyers whose fees are covered by the diocese's estate, was denied without prejudice during a hearing.

Why it matters

The diocese's inability to defer legal fee payments highlights the financial challenges it faces as it navigates the bankruptcy process, which has been complicated by the large number of sex abuse claims against the diocese. The ruling means the diocese must continue to pay its lawyers and other professionals during the ongoing bankruptcy case.

The details

Lawyers for a committee representing around 350 sex abuse claimants are among those who will continue to receive monthly fee payments from the diocese's estate despite the diocese's request to defer those payments. The judge denied the diocese's request without prejudice, meaning the diocese could potentially refile the motion at a later date.

• The bankruptcy case for the Diocese of Oakland has been ongoing for months.