Following Mediation, Diocese Avoids Foreclosure of Parishes, Schools, Catholic Culture, June 1, 2012

Following Mediation, Diocese Avoids Foreclosure of Parishes, Schools

Catholic Culture
June 1, 2012

http://www.catholicculture.org/news/headlines/index.cfm?storyid=14492

A pact mediated by a federal judge has prevented the foreclosure of 22 parishes in the Diocese of Spokane, which had filed for bankruptcy in 2004.

A 2007 bankruptcy settlement plan "provided for the possibility of claims to be made after the bar date of March 2007, for a period of nine years, or until 2016," Bishop Blase Cupich explained. "At that time, one million dollars were set aside to cover these 'future claims.' 22 parishes in Spokane County stepped forward on behalf of all the parishes in the diocese to offer their parish properties as collateral to assure that awards exceeding this one million dollar amount would be paid."

"The trustee appointed to oversee the bankruptcy plan informed me that the one million dollar fund would soon be exhausted with the payment of several future claims awards and that we would need to recapitalize the future claims fund immediately or face foreclosure on parish and school properties to satisfy this obligation," he added in a letter to parishioners.

Following mediation, "no parish will be foreclosed to satisfy the obligations related to awards in these future claims cases," "all appeals will be withdrawn, thus eliminating the costly legal fees we were incurring," and "all existing future claims cases and the mediation expenses will be satisfied by our contribution of $1.5 million, which is a fraction of the earlier projected amounts."

Bishop Cupich, who was transferred from Rapid City (South Dakota) to Spokane in 2010, "regretted these things that made the claims possible or necessary, but also was really willing to take a businesslike approach to getting things done," said US District Judge Michael Hogan, the mediator.

"While he represents an interest and strongly defended the Church, nevertheless he didn't defend inappropriate activity. And he was a tremendous partner in finding resolution of these matters."