Archdiocese Bankruptcy Could Have Domino Effect
Diocese in Tucson, Ariz., Has Discussed Filing for Bankruptcy
By Ellyn Ferguson
July 8, 2004
WASHINGTON — The Portland Archdiocese is the first, and probably not the last, U.S. Roman Catholic diocese to seek bankruptcy protection from multimillion-dollar judgments in clergy sexual-abuse cases.
"I'm surprised it didn't happen earlier," said Father Thomas Reese, editor-in-chief of America, the weekly Catholic magazine published by the Jesuit Society. "Given the judgments, someone had to run out of money. I don't think this is the last diocese."
The Tucson Diocese in Arizona has set a mid-September deadline for deciding whether to file for bankruptcy, and the Boston Archdiocese sold the former archbishop's residence and surrounding land to raise $90 million to help pay a settlement with sexual-abuse victims.
The Boston Archdiocese is closing schools and parish churches to cut costs because donations and attendance at Mass dropped after revelations of sexual abuse by priests. The Boston Archdiocese's Web site states that the properties will be sold and the proceeds will be shared with remaining parishes and used to support health and pension funds for church employees.
Tucson Bishop Gerald Kicanas has publicly considered Chapter 11 bankruptcy as one way to deal with possible judgments in the cases of more than 20 alleged victims. Lawyers representing people with possible claims have asked the courts to stop the diocese from selling any property before Kicanas decides whether to file for bankruptcy.
In a July 6 memo to his diocese, Kicanas summarized separate meetings he had last week with priests and lay leaders in which reorganization under Chapter 11 was discussed. Kicanas wrote that they were "clear that if Chapter 11 were the best and only option for the diocese to provide an orderly way to respond to all victims, it would be the best path."
Kicanas was on vacation Wednesday and could not be reached for comment. However, the Tucson Diocese released a statement in which he called the Portland action a surprise, although not unexpected.
"We continue to explore the best option for our diocese," Kicanas said in the statement.
Portland filed for Chapter 11 bankruptcy Tuesday.
No one knows yet what it will mean for Oregon or dioceses that might follow its lead.
"It is a step into the unknown," said Monsignor Brian Ferme, dean of Catholic University of America's School of Canon Law in Washington, D.C.
Ferme does not think there will be a rush among dioceses to seek bankruptcy protection.
"I must admit I would be surprised if it would have a snowball effect," Ferme said.
He does not think the Vatican would approve, and he also thinks that few bishops would be willing to share control of their diocese with a judge.
Reese said that dioceses in financial trouble in the past could turn for help to wealthier dioceses.
"Today, everybody's ship is sinking," he said, referring to the breadth of sexual-abuse cases and the size of resulting court judgments or negotiated settlements.
The victims want justice and the civil lawsuits have been the way to get it, Reese said.
But he predicted that more dioceses will be unable to pay those judgments and will lay off employees, cut services to the poor and close schools and churches.
"The tragedy is that some bishops did not go to jail," he said.
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