Vatican Consulted in Bankruptcy Decision, Archdiocese Says

Associated Press, carried in Statesman Journal [Portland OR]
July 12, 2004

Portland Archbishop John G. Vlazny discussed the possibility of Chapter 11 bankruptcy protection with the Vatican before taking action, said a spokesman for the Archdiocese of Portland.

But a news magazine reports this week that the Vatican believed Vlazny was bluffing, and others say the filing went against the Vatican's official position.

Vlazny filed on behalf of the archdiocese last week. It postponed two sex abuse trials scheduled to begin last week.

If Vlazny and the Vatican did discuss the legal action, the filing would seem to indicate that the Vatican won't stop other U.S. dioceses from going to court in an attempt to shield church assets. Bishop Gerald F. Kicanas of Tucson, Ariz., has said his diocese is considering bankruptcy, according to the Arizona Star newspaper.

Vlazny did not return phone calls Sunday night, but Bud Bunce, spokesman for the archdiocese, said the archbishop and the Vatican discussed the Chapter 11 topic before and after the filing.

"He has had conversations with the Vatican on this topic; they are ongoing and privileged," Bunce said.

The Rev. E.B. Painter, Jesuit pastor of The Madeleine Church in Portland, said at Mass on Saturday that the archbishop discussed the matter with the Vatican as early as January, The Oregonian reported in its editions today.

Painter said Vlazny had talks in January with the Vatican ambassador to the United States, and then traveled to Rome, where he explained to some Vatican officials what Chapter 11 protection might entail.

Earlier, in June 2003, Vlazny had written to the Catholics in his archdiocese telling them that bankruptcy was an option. The Portland archdiocese and its insurers have spent more than $53 million to settle more than 130 claims of priest abuse. Lawsuits by 60 more plaintiffs remain unsettled.

The archbishop's acknowledgment that he spoke with the Vatican comes as Time magazine reports that Vlazny's action caught the Vatican by surprise. The July 19 story said a senior Vatican official was convinced that Vlazny was bluffing until a wire-service story was read to him.

The Time story also anonymously quotes a U.S. cleric, who thinks Vlazny acted without Vatican approval.

"The official position was that this was not an option," the cleric said. "There's a boldness to what (Vlazny) did."

The magazine sources said Cardinal Bernard Law, the former leader of the Archdiocese of Boston, had been denied permission to file for Chapter 11 bankruptcy protection in 2002.


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