An Australian court has granted the religious order Catholic Brothers a pause on payouts to child sex abuse victims after it claimed that it was running out of money to settle millions of dollars in civil claims.
The group had told the court it was going broke and that it planned to sell its remaining properties to fund a partial settlement. It sought the payment moratorium to give victims time to consider this scheme, local media reported.
The order estimates the group owes victims A$774m ($534m; £400m), which exceeds its $23m cash and $216m property holdings.
Founded in Ireland, the Christian Brothers has run schools and orphanages in Australia and New Zealand since the 1850s.
According to its website, the Oceania chapter’s work involves “adult education, social justice activities with refugees, asylum seekers, indigenous people and disadvantaged youth”.
But investigations have found that the Christian Brother’s schools and orphanages have been the sites of widespread child sexual abuse since the 1950s.
In 2013, a royal commission looking into institutional responses to child sexual abuse concluded that the Christian Brothers “completely failed… to protect the most vulnerable children in their care”, with several of its brothers later convicted of sexual assault.
The commission also found that the leaders of the order had been aware of the abuse but did nothing to stop it.
ABC News reported that as of last week, there were 32 cases of alleged abuse by Christian Brothers due for trial and 540 applications before the National Redress Scheme, which helps survivors of child sexual abuse access payment and other forms of support.
Given the moratorium, these cases will be suspended until the next hearing in September.
Some complainants awaiting trial say they have been blindsided by this sudden development.
“I was hoping to resolve my claim quickly to move on,” one told Guardian Australia, while another said they felt as though they had been stabbed in the back by a “sharp, long, bladed knife”.
Judge Scott Nixon said he granted the moratorium “in order to preserve the opportunity for the scheme to be considered by claimants, given that opportunity may be lost”.
Earlier this week, the Christian Brothers became the first Catholic order in Australia to propose a liquidation.
The Australian government has raised concerns around property transfers the Christian Brothers made to another entity, Edmund Rice Education Australia, which had contributed to the order’s financial troubles.
Edmund Rice Education Australia, named for the Christian Brothers’ Irish founder, was set up in 2007 to run the order’s schools. An EREA spokesman has said that it is “not responsible for the financial affairs or liabilities of the Christian Brothers”.
Some of these properties changed hands for as little as $1, according to records seen by Guardian Australia. Altogether, the transferred properties would now be worth $2bn, according to the Australian Financial Review.
Sera Mirzabegian, the lawyer representing the government, said it would be “very disturbing and concerning if arrangements were made to shield assets or limit institutional liability”.
Meanwhile the proposal to liquidate its real estate has sparked anxiety in schools.
The board at the St Thomas of Canterbury College in Christchurch, New Zealand, has said it would fight to keep the school operating on its current site, which is owned by a charitable trust overseen by the order.
Hundreds of cases of child abuse involving Christian Brothers institutions in the UK, the US and Canada have also come to light over the years.
In 2013, the North American chapter paid A$16.5m to 400 victims of child sexual abuse across the US.
