Bankruptcy status near end for Diocese

By Rose Albano
Manteca Bulletin
January 17, 2017

http://www.mantecabulletin.com/section/1/article/140918/

The Catholic Diocese of Stockton will come out of its bankruptcy status in the next few weeks after the U.S. Bankruptcy Court for the Eastern District of California approved the “consensual plan of reorganization” filed three years ago by Bishop Stephen Blaire.
The approved plan provides “$15 million to survivors of sexual abuse as well as non-monetary commitments which are important aspects of any healing process.”
The announcement was made to diocesan parishioners during the Masses on Sunday and the anticipated Masses on Saturday. The full text of the announcement was also included as an insert in the parish bulletins.
In the bilingual (Spanish and English) written statement from the diocese’s communications director, Sister Terry Davis, Bishop Blaire stated, “We wish to thank all of the parties, including the court appointed mediator Judge Gregg W. Zive, Judge Klein, the sexual abuse survivors, the insurers, the creditors’ committee, and their respective counsel, our counsel, and the entire Catholic community, for helping bring this very difficult chapter in the history of the Diocese to an equitable resolution.”
The reorganization plan held a number of key provisions resulting from months of negotiations involving the creditors, insurance carriers, the diocese and other parties, all of which had to vote on the proposed plan. The plan received “nearly unanimous approval,” according to the announcement.
Those key provisions included the following as announced by the diocese:
u$15 million through cash contributions and a promissory note to fund a trust for the exclusive benefit of survivors of clergy sexual abuse,
upayment of at least 50 percent of what is owed to general unsecured creditors,
urestructuring of secured loans, and,
ufunding for the plan coming from the Roman Catholic Bishop of Stockton, settling insurance carriers and certain other entities associated with the diocese.
Secured loans are loans in which borrowers use assets such as property or vehicle as collaterals to secure the money being borrowed.
The diocesan announcement further explained: “The approved consensual plan will allow the diocese to exit bankruptcy within the next few weeks, ...and that the diocese with limited financial assets will be able to continue its essential ministries and services to meet the needs of the parishioners and others who rely on the diocese’s ministry, education, and charitable outreach.”
34 claim of sexual abuse filed
In the three months prior to the filing of bankruptcy protection by the diocese in August of 2014, a total of 34 claims of sexual abuse were received. Those claims did not identify any priest currently in active ministry at the time. Bishop Blaire called the filing “a painful but necessary decision” and that it was “the only way we can fulfill our responsibilities to the victims of sexual abuse and our responsibilities to the parishes and communities we serve.”
Not affected in the bankruptcy filing are parishes in the diocese, parochial schools such as St. Anthony of Padus School in Manteca, Catholic cemeteries, and the Madonna of Peace Retreat Center in Copperopolis because these are separate corporations. However, prior to the filing, church pastors were advised to secure independent legal assistance to prepare themselves of any potential challenges in light of what happened to other dioceses in the country where creditors have challenged the status of the legal filings.
Notices also were mailed to all parish households and parish school mailing lists which included St. Anthony of Padua in Manteca, St. Patrick’s Parish in Ripon, and Our Lady of Guadalupe in Lathrop.
Information about the nearly three dozen sexual abuse claims are confidential. Prior to the filing deadline, the diocese placed advertisements in more than 24 local regional newspapers including one in USA Today in an effort to inform potential claimants of the legally mandated Aug. 15, 2014 bankruptcy reorganization filing deadline.
The announcement did not disclose or explain how subsequent sexual charges, such as the one filed against Monsignor Lawrence McGovern, a former pastor of St. Anthony of Padua in Manteca and current pastor of Presentation Church in Stockton. He is currently on leave following the filing of the sexual complaint.
Coming out of bankruptcy for the diocese comes as Bishop Blaire is getting ready to retire near the end of this year. No successor has yet been named.
The approved bankruptcy reorganization plan for the diocese plus the documents filed in this case can be viewed at www.kccllc.net/stocktondiocese