For the Sake of Expedience LA Archdiocese Uses Catholic Schools As Collateral for Loan to Help Pay off Sex-Abuse Settlement, California Catholic Daily, April 25, 2008

"For the Sake of Expedience"
LA Archdiocese Uses Catholic Schools As Collateral for Loan to Help Pay off Sex-Abuse Settlement

California Catholic Daily
April 25, 2008

http://www.calcatholic.com/news/newsArticle.aspx?id=a55062ff-0bc6-4799-9b50-36027eb16548

In its attempts to pay its share of a $660 million settlement reached with victims of sexual abuse by clergy, the Archdiocese of Los Angeles has turned to school properties to guarantee a loan needed to finance payment of part of the out-of-court agreement.

The archdiocese is not selling the school properties in question six high schools but is using them as collateral for a $50 million loan from the Allied Irish Bank, according to press reports. Archdiocesan spokesman Tod Tamberg said five of the schools are in no danger of closing, and one had already been scheduled to close, the Associated Press reported.

The five schools not at risk of closure are St. Bernard in Playa del Rey, St. Bonaventure in Ventura, Bishop Amat in La Puente, Bishop Conaty-Loretto in Los Angeles, and Bishop Montgomery in Torrance. Daniel Murphy High School in Los Angeles, already slated for closure, was also among the six schools used as collateral.

The archdiocese has said it would sell as many as 50 non-parish properties to cover its up to $373-million portion of the sex abuse settlement. Earlier this year, the archdiocese sold its 12-story chancery offices on Wilshire Boulevard in Los Angeles for $31 million. Among other properties announced for sale was a small convent in Santa Barbara.

In a news release last October, the archdiocese cited "a decade-long decline in enrollment" at Daniel Murphy High School, "combined with increased operating costs" and the "severe financial challenges face by the archdiocese" as the reason for its closure.

On Jan. 31, the web site Los Angeles Wave reported that Los Angeles Councilman Bernard Parks (a Daniel Murphy graduate) and former L.A. Mayor Richard Riordan were working to save Daniel Murphy. According to Wave columnist Betty Pleasant, Riordan reportedly told a group of parents seeking to save the high school "that he will try to line up major Catholic donors and put together a group of financiers to form a board of directors and operate the school themselves."

The archdiocese had indicated earlier that it planned to sell the Daniel Murphy property.

"We picked these schools simply for the sake of expedience," Tamberg told the Ventura County Star. "We picked a few large properties that would together provide sufficient collateral for the loan. The alternative was to try to assemble dozens and dozens of different sizes of properties in a short amount of time to try to come up with the sufficient collateral. This was just the easiest thing to do."

St. Bonaventure High School principal Marc Groff said he was aware of plans to use the school as collateral "about two months ago but was instructed by archdiocese officials to not publicly discuss it," the Star reported.