Talks to settle 28 sexual abuse claims against the Catholic Diocese of Spokane have failed, leaving the possibility the diocese will file for bankruptcy.
The lawsuits all involve allegations against former priest Patrick O'Donnell, 62, who has admitted sexually abusing boys from the time he was in seminary.
"We could not reach a solution which would provide fairness, justice, and equity for all involved parties," Bishop William Skylstad said.
Insurance companies were not willing to pay the demands of the victims, which totaled millions of dollars, Skylstad said. Lawyers for the victims also sought additional millions from the diocese, which it could not pay, Skylstad said.
The amounts were not disclosed because of a confidentiality agreement between the parties.
Skylstad said the diocese must consider its options. While he did not mention bankruptcy, he said in a letter to parishioners last week that failure of the talks may force the diocese to declare bankruptcy.