The Archdiocese of Portland, in the US state of Oregon, has filed for bankruptcy in what it believes is the first such action by a US Roman Catholic diocese attemtping to pay compensation for sexual abuse settlements.
The move halts two trials seeking a total of $155 million, that were due to start yesterday and has sparked outrage among claimants.
Archbishop John Vlazny said bankruptcy would allow the Church pay all claims without selling off parish assets.
"It will allow us to continue our good works without fear of an impending large verdict. The operation of our parishes and schools will continue as usual," Archbishop Vlazny said.
The archdiocese has paid $21 million from its own funds to settle claims in the last four years and $53 million over the last five decades but insurance companies have refused to cover 60 current claims.
"The pot of gold is pretty much empty right now," Archbishop Vlazny said.
The church, which serves about 350,000 parishioners in Oregon, declined to name its insurers. It said it believed it was the first US Roman Catholic diocese to file for bankruptcy protection.
Plaintiffs in the latest cases, who accuse former priest Maurice Grammond of abusing more than 50 boys in the 1980s, blasted the church for "ducking its responsibility" and trying to avoid public disclosure of the details at a trial.
"For me it was like having sex with God," said Mr James Devereaux, who rejected a settlement offer from the church. "I knew I had committed the ultimate sin and that I was doomed."
His attorney Mr David Slader sid: "They [the church] have taken the cheap and easy way out and have bucked responsibility."
The bankruptcy filing turns the plaintiffs into unsecured creditors along with other victims who might claim damages against the church, said Mr Bill Barton, another plaintiff's attorney.
"I'm terribly disappointed," Mr Barton said, adding that his client had rejected a cash settlement offer.
