Diocese abuse settlement exceeds $21M

By Elizabeth Hardin-Burrola
Gallup Independent correspondent
March 22, 2016

ALBUQUERQUE – After weeks of delays, attorneys for the Diocese of Gallup filed their proposed plan of reorganization in U.S. Bankruptcy Court Monday.

The Gallup Diocese and other participating parties — insurers and Catholic entities — have agreed to contribute more than $21 million to fund the plan, much of which will go to compensate 57 individuals who filed clergy sex abuse claims. Catholic Mutual will also issue an unknown claims certificate for $1.8 million that will insure any abuse claims that may be filed in the future.

Possible additional claims money from an insurance liquidation case may further boost the plan’s total funding to nearly $24 million.

The diocese’s attorneys filed the plan and disclosure statement at 2 a.m. MST Monday, just hours before a hearing in front of U.S. Bankruptcy Judge David T. Thuma. Susan Boswell, the diocese’s lead bankruptcy attorney, had promised Thuma the plan would be on file before Monday’s hearing.

Missing from the proposed plan are any details of the non-monetary terms of the diocese’s settlement agreement with abuse claimants. Non-monetary provisions include commitments by the Diocese of Gallup that can range from public apologies to the public release of abusers’ personnel files.

Boswell, along with James Stang, the legal counsel for the Official Committee of Unsecured Creditors that represents abuse claimants, told Thuma the non-monetary terms were still being negotiated. Both said they hoped the document would be finalized by Friday.

Funding sources

The following is a list of the participating parties and their financial contributions to the plan of reorganization, beginning with the largest funding source.

Catholic Mutual Relief Society of America and Catholic Relief Insurance Company of America, collectively referred to as Catholic Mutual: $11,550,000. Catholic Mutual’s additional $1.8 million Unknown Claims Certificate will have a maximum term of eight years.

Diocese of Gallup: $3,020,000. The diocese sold a number of parcels of real property in two auctions in September. However, according to plan documents, the auction sale of 64 parcels of land that make up La Vega Estates, located near San Rafael, did not close. The loss of that $38,500 sale took a bite out of the diocese’s total auction profits of $160,660.

To raise significant money for its contribution, the Gallup Diocese will obtain a loan from the Catholic Order of Foresters, to be secured by its Gallup Catholic School and Sacred Heart Retreat property. That loan commitment is in the principal amount of at least $2.3 million.

St. John the Baptist Franciscan Province of Cincinnati: $1,850,000. Prior to the mid-1980s, this Franciscan province provided the majority of Franciscan friars to the Gallup Diocese, including some clergy sex abusers.

New Mexico Property and Casualty Insurance Guaranty Association: $1,850,000. The association provides protection to the Gallup Diocese for insurance policies the diocese had with the now insolvent Home Insurance Company.

Catholic Peoples Foundation: $665,000. This nonprofit is a fundraising organization for the Diocese of Gallup.

St. Bonaventure Indian Mission and School: $550,000. This Catholic school and charitable organization became embroiled in a property dispute with the diocese. In exchange for the $550,000 payment, the Gallup Diocese will quit claim the disputed property in Thoreau to St. Bonaventure.

Southwest Indian Foundation: $515,000. This diocesan nonprofit will purchase the Diocese of Gallup’s Catholic Indian Center property and then lease space back to the diocese. According to court documents, the diocese may possibly move all or part of its operations into the CIC property.

Parishes in the Gallup Diocese: $500,000. Local parishes are contributing money to the plan.

Diocese of Phoenix: $300,000. No explanation was provided regarding Phoenix’s participation.

Franciscan Province of Our Lady of Guadalupe in Albuquerque: $300,000. This province has provided Franciscan friars to the diocese since the mid-1980s.

In addition, the diocese’s plan of reorganization may receive money from the Home Insurance Company Liquidation, subject to approval by the New Hampshire court overseeing the liquidation case.

The Diocese of Gallup is seeking approval for its proposed plan from clergy abuse claimants and U.S. Bankruptcy Court. A follow-up hearing has been scheduled for April 26.


















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