Archdiocese Expected to Settle Sex Cases
Predatory Priests - Mediators in the Portland Bankruptcy Process Likely Will Disclose Details Monday after Months of Secret Talks

By Steve Woodward and Ashbel S. Green
The Oregonian
December 9, 2006

The two judges mediating the Archdiocese of Portland bankruptcy have scheduled a news conference Monday morning in Eugene after more than three months of secret negotiations over priest sex-abuse claims.

Though a gag order has kept a lid on the proceedings, the judges are expected to announce a multimillion-dollar settlement of more than 100 claims of child sex abuse by priests and other employees of the archdiocese.

A media advisory announcing the news conference says only that the purpose "is to discuss legal matters pertaining to the pending bankruptcy petition. . ."

The two mediators in the priest-abuse settlement talks are U.S. District Judge Michael R. Hogan and Lane County Circuit Judge Lyle C. Velure.

The mediations follow similar settlement negotiations more than a year ago, when another set of mediators tried to settle the first of about 200 sex-abuse claims filed against the archdiocese. Nearly three dozen claimants agreed to dollar amounts ranging from $5,000 to $1 million, but all the agreements fell through for other reasons.

Since then, dozens of claims have been withdrawn or disallowed, although more than 100 were on track to go to jury trials in state or federal court by the time the current mediations began.

The first trial, in fact, is scheduled to start at 9 a.m. Monday in U.S. District Court in Portland, an hour before the news conference. It is the same $135 million case that was scheduled to go to trial 888 days earlier -- the same morning the archdiocese declared bankruptcy, thus temporarily freezing all litigation against it.

The current rumored settlement would mark the beginning of the end of the archdiocese's 29-month-long bankruptcy, which has cost the church about $16 million in legal and professional bills, as well as triggered budget cuts and layoffs.

A settlement would still leave much work to be done. The archdiocese and the other parties must incorporate the terms of the settlement into a new reorganization plan. U.S. Bankruptcy Judge Elizabeth L. Perris must rule that the plan is equitable for all parties involved. And the archdiocese's creditors, including sex-abuse claimants, must vote to adopt the revised plan.

At that point, the archdiocese would emerge from bankruptcy, and claimants entitled to payments would begin to receive their checks.

In addition, any claimants who decline to settle would continue to be free to pursue jury trials.

The archdiocese's latest disclosure statement -- the detailed accounting that accompanies a bankruptcy reorganization plan -- estimates that pending claims can be settled for about $38 million.

That figure is based on the average payments for 140 cases settled before the bankruptcy -- specifically $631,211 for each victim of the late Rev. Maurice Grammond, Oregon's most-accused priest; $773,443 for each victim of the Rev. Thomas Laughlin, the only Oregon priest to be convicted of a child sex-abuse crime; and $182,230 for each of the remaining claimants.

The church's reorganization plan also must provide money to pay potential future claimants. Those claimants are victims who are now minors, adults with repressed memory syndrome and adults who remember the abuse but don't yet realize that, as a result of the abuse, they have been injured -- a category that includes everything from addictions to sexual dysfunction.

A court-appointed consulting firm estimates that future claims likely will range between $20 million and $52 million.

To foot a potential total bill of $58 million to $90 million, the archdiocese proposes to establish a line of credit that would be secured, in part, by parish real estate and investments. An additional $20 million, which the archdiocese says its insurers owe for past settlements, would become available if the church prevails in current court battles.

In its disclosure statement, the archdiocese says it already has begun talks with potential lenders.

Ashbel S. "Tony" Green: 503-221-8202;


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