Bankruptcy Expert: Filing Would Be 'Good Thing' for Tucson Diocese, Sex-Abuse Victims
By Sheryl Kornman
Tucson Citizen [Tucson AZ]
September 9, 2004
If the Roman Catholic Diocese of Tucson files for bankruptcy protection it will be a good thing, according to Marti Kopacz, a consultant to the Archdiocese of Boston while it considered Chapter 11 to resolve claims of sexual abuse by priests.
Boston chose instead to sell some of its valuable properties to settle claims.
Kopacz, a fellow of the American College of Bankruptcy, is an analyst for New York City-based Alvarez & Marsal, a global firm which provides turnaround management consulting and crisis management services.
She said Chapter 11 is the only way to go if the Tucson diocese wants to resolve the matter in a way that is fair to everybody.
"It allows the diocese to deal with it once and for all," she said.
And it allows the diocese to make it clear to claimants who have sued that "we're not going to be more fair to you because you have an attorney," Kopacz said.
Anyone with a claim, whether they are represented by an attorney or not, can come forward during the bankruptcy period and confidentially stake a claim to part of the diocese's assets.
Bishop Gerald Kicanas, who oversees the Roman Catholic Diocese of Tucson, said he will make a decision on whether the diocese will file for federal bankruptcy court protection by mid-September.
If the diocese files, it will follow Portland and become the second Roman Catholic diocese to file for Chapter 11 to settle claims of sexual abuse by priests and other personnel.
Tucson attorneys Kim Williamson and Lynne Cadigan, who represent clients in 16 cases against the Tucson diocese, said yesterday the bankruptcy action appears inevitable.
"We're sort of resigned at this point," Williamson said.
"From everything they've indicated to us and told us, the filing will probably happen the end of this week or next week," she said. "We're hiring bankruptcy attorneys and getting prepared."
Cadigan and Williamson have been unable to settle with the diocese. At least eight civil trials are scheduled; the next one begins Sept. 29 in Yuma.
"We think we were being reasonable. They think we're too high. We think they're too low. They haven't showed us anything that (indicates) they don't have the assets to help the victims," Williamson said.
The diocese has agreed to pay $15 million to some of Cadigan and Williamson's clients who filed earlier.
The diocese also faces other sexual abuse lawsuits and private claims.
The total amount being sought from the diocese by all parties has not been made public.
Williamson said a bankruptcy proceeding will prolong the difficult matter for clients she said will be "revictimized" by having to take part in it.
The bishop wrote in his Aug. 30 memo to parishioners and priests that "as the steward of our diocese and for the good of our parishes, I cannot agree to a settlement that would strip the diocese of everything, especially because we believe it is very likely that more cases could be filed and that more victims could come forward seeking counseling assistance."
The diocese, which has 350,000 parishioners and encompasses nine Arizona counties, has a variety of assets, including more than 100 properties - some of it vacant land in remote areas - listed on county assessor rolls.
"No amount of money can fix this and resolve all these cases," Kopacz said.
But money will be paid because "money is social justice in America. You want to do the best you can for all the victims, to try to right these terrible wrongs," she said.
Kopacz said there are three categories of victims expected to be included in the diocese's bankruptcy proceeding.
n The victims who are represented by counsel. "Who they are is known at some level, even if their suit is filed under the name John Doe."
n The group of victims known only to the diocese and who are not represented by counsel.
"These are individuals who can't imagine suing their church. They just can't do it," Kopacz said.
n The victims out there who have not yet come forward. "That's what's problematic as you look out onto this landscape," the consultant said.
Kopacz said the diocese is faced with a dilemma: If it settles with the cases they know and depletes its assets, there may not be money left over to settle lawsuits brought in the future.
"It's a philosophical issue that any diocese faces," Kopacz said. For the Tucson bishop, the issue is "maybe I can settle the stuff I know about. How can I settle what I don't know about?"
The confidentiality of the bankruptcy proceeding may lead to more people coming forward, giving the diocese and court a better idea of how much money will be needed.
"There are a lot of people out there that, given the right opportunity, being pushed to make a choice, will come forward to the bankruptcy court," Kopacz said.
"The bankruptcy court is a wonderful forum to bring everybody to the table to hammer things out. . . . It's really the only way you can truly know it's over for everybody."
Kopacz predicts more American dioceses will seek Chapter 11 protection after Tucson's filing, as pedophilia damage claims grow.
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