Portland Diocese's Bankruptcy Stuns Bishop in Tucson

By Sheryl Kornman
Tucson Citizen
July 9, 2004

TUCSON - The Tuesday bankruptcy filing by the Archdiocese of Portland, Ore., was a "surprise" to Bishop Gerald Kicanas, the leader of the Tucson Diocese.

Kicanas said earlier this month he will decide by Sept. 15 whether to file bankruptcy for the Tucson Diocese, which faces unresolved claims of sexual abuse by its priests and other church personnel.

A Chapter 11 action in U.S. Bankruptcy Court would lay out all the assets of the diocese, determine its debts, make decisions on how much and who should be paid and in what order. Kicanas has said "it is the best way to respond to all victims."

Fred Allison, the Tucson Diocese communications director, issued this statement by Kicanas in response to the Portland bankruptcy:

"The news of the decision by the Archdiocese of Portland to file for Chapter 11 reorganization and protection, while not unexpected, came as a surprise.

"Like the Diocese of Tucson, they have been struggling with the decision.

"Obviously, the reason for such action is based on the realization that the best way to respond to all victims, those known and those not yet known, those who are litigating and those not, is to seek Chapter 11 protection, which will provide a response to victims while allowing the mission of the Church to continue.

"We continue to explore the best option for our Diocese."

Allison said the bishop is out of the country and was not available Thursday. The bishop has been meeting with attorneys for the diocese for about a month as he prepares to make a decision in mid-September, just before a diocese sex-abuse case goes to trial.

If the Tucson Diocese files bankruptcy papers, it would be the second Catholic diocese in the country to file for Chapter 11 protection from creditors seeking compensation in sex-abuse cases.

The Tucson Diocese is negotiating settlements with people who say they were abused by church personnel. The number of people involved has not been made public.

About 15 plaintiffs who sued the diocese in sex-abuse cases are awaiting their day in court, or a settlement.

Kicanas said earlier this month he discussed the Tucson Diocese's financial situation with Vatican officials during a recent visit to Rome.

In Tucson, he has met with church leaders, Catholic schoolteachers and parishioners and told them he sees Chapter 11 as the way to go in the face of potentially ruinous debts.

The Dallas Diocese got Vatican permission in 1997 to file for bankruptcy but victims settled for a lesser amount than they were awarded in a judgment and bankruptcy was not necessary, the Associated Press reported.

In the Portland matter, plaintiff's attorneys estimate the Portland Diocese assets are worth about $500 million.

The diocese claimed assets of less than $50 million in the bankruptcy filing.

Assessor's records in Portland say the church's property is worth about $300 million.

Attorneys representing plaintiffs suing the Tucson Diocese have gone to court to seek full disclosure of diocese assets. Lynne Cadigan, the Tucson attorney who with Kim Williamson has won millions in abuse settlements from the Tucson Diocese, said Thursday attorneys are willing to negotiate settlements but the diocese is not disclosing the value of its land and other properties. Kicanas told the Tucson Citizen the diocese's more than 100 land holdings are rural and not of much value.


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