Bishop Can't Sell Church Buildings
Spokane Diocese Wins Court Battle As It Tries to Settle Sex-Abuse Cases

By John K. Wiley
The Associated Press, carried in Seattle Post-Intelligencer
June 17, 2006

SPOKANE -- Eastern Washington Catholic parishes planned their next moves Friday after a judge ruled Spokane Bishop William Skylstad cannot sell churches and school buildings to satisfy clergy sex-abuse settlements.

In what was seen as a major victory for the 82 parishes in the Catholic Diocese of Spokane, U.S. District Judge Justin Quackenbush on Thursday ruled that individual parishes are not owned by the bishop and thus cannot be sold by him to pay victims of abuse by priests.

The ruling was closely watched by dioceses and individual parishes across the country caught up in the church's sex abuse crisis.

Quackenbush reversed U.S. Bankruptcy Judge Patricia Williams, who ruled parish properties are owned by the bishop and could be liquidated to help pay to settle victims' claims.

Bob Hailey, co-chairman of the diocese's Association of Parishes, said parishes have never been opposed to contributing to the settlements.

"We objected to the concept of holding parish properties hostage, so that if we fail to meet goals, we lose our churches," Hailey said. "The parishes are innocent victims just as much as those who were abused. Whatever settlement is reached needs to be a settlement that doesn't create a whole new class of victims: the people in the pews."

Mediation is scheduled to begin July 7 in Reno, Nev.

"The parishes are going to mediation with an open mind, and we're hoping everyone else is, too," Ford Elsaesser, a lawyer representing the Association of Parishes, said Friday.

The diocese became the third in the nation to file for Chapter 11 bankruptcy protection in December 2004, listing assets of $11 million against liabilities of at least $81.3 million, most from sex-abuse claims.

Shaun Cross, a lawyer representing the diocese, has said parishes will be expected to play a significant role in any "global settlement" with the more than 100 people who claimed they were abused.

Capital campaigns could expect to raise about $8 million, but it would be a tough sell, Hailey said.

"Every parish has the right to say yes or no," Hailey said. "It's going to take a voluntary effort on the part of every parish."

The amount individual parishes are willing to contribute "is on the table," Elsaesser said, adding that parishes are not willing to liquidate as part of any settlement.

"At this point, we are focused on the fact that we are in bankruptcy, and that all of the money comes from the parishioners," he said. "And except for insurance settlements, any dime in a global settlement is coming from parishioners."

The diocese supported the parishes' position that the bishop holds title to parish properties in trust, but does not own them.

The diocese serves about 90,000 Catholics in 82 parishes in 13 Eastern Washington counties. Land and buildings owned by individual parishes are estimated to be worth about $80 million.

Without the parish assets, the diocese can raise between $31 million and $33 million from settlements with insurance companies, the sale of the diocese office building and other properties, and contributions from other diocesan entities, Cross said last week.

Skylstad earlier had offered to settle claims of 75 people who filed, or threatened to file, lawsuits for $45.7 million. But Williams rejected that offer, saying a bankruptcy plan must include all claimants.

Attorney James Stang, who represents many of the abuse victims, said Friday he was waiting to see Quackenbush's written order before deciding whether to appeal the ruling.

David Clohessy, national director of the Survivors Network of those Abused by Priests, said the rulings by Williams and Quackenbush are a blow to victims because they will reduce the amount of money available.

"I'm sure some child sex- abuse victims feel like they've been kicked in the gut again, all in the name of protecting Skylstad's secrets, coverups, reputation and assets," Clohessy wrote by e-mail from St. Louis. "It's sad that a step toward healing for everyone involved has apparently been delayed once again by a church official's legal maneuvering."


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