Diocese in Phoenix Calls Bankruptcy Unlikely Option

By Joseph A. Reaves
Tucson Citizen [Phoenix AZ]
September 22, 2004

All indications are the Roman Catholic Diocese of Phoenix is in better financial shape than its sister diocese in Tucson and should be able to avoid filing bankruptcy, church and legal officials said.

As with Tucson, the diocese up north faces lawsuits stemming from decades of sexual abuse by priests and an orchestrated coverup by its leaders.

But unlike Tucson, the Phoenix diocese has been forced to pay a relatively small amount to settle lawsuits and expects insurance policies to cover the bulk of claims that are outstanding.

"The Diocese of Phoenix has no need to consider bankruptcy," said Joseph C. Anderson, financial officer for the diocese.

The diocese based in Tucson has paid more than $16 million in settlements to 22 plaintiffs and still faces 20 sex-abuse cases.

Phoenix church officials, on the other hand, said this year they have paid about $3 million to settle claims. And while they face about a dozen more lawsuits, much of the damages should be covered by insurance.

Even without the threat of damages from lawsuits, the recent downturn in the economy forced the diocese in Phoenix to re-evaluate and sometimes cut back its finances.

"The diocese has a policy of liquidating property that is not needed for parishes or other works of the Catholic Church," Anderson said. "We have done this. We have also slowed down our financing of construction projects within the diocese."

In recent months, Our Lady of Perpetual Help Parish in Scottsdale was told to forgo building classrooms and instead construct an office building and parking garage to bring in revenue. Expansion plans were put on hold for Seton Catholic High School in Chandler.

While Anderson and others, including a lawyer with close ties to the church, insisted bankruptcy isn't likely or a serious consideration, no one in the diocese ruled out the possibility.

Anderson stressed that the diocese is concentrating on more pressing day-to-day practicalities.

"The biggest financial challenge facing us is the need to keep up with the growth of the population in the counties serviced by the diocese: Maricopa, Yavapai, Coconino and Mohave," he said.

"We are grateful to all the faithful of this diocese. Contributions to our annual Charity and Development Appeal as well as contributions to parishes have remained steady during troubled economic times and a difficult time in the history of the church."


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