Alaska Diocese to File for Bankruptcy

Associated Press, carried in San Francisco Chronicle
February 13, 2008

The Catholic Diocese of Fairbanks plans to file for bankruptcy after negotiations to settle sexual abuse claims failed, the bishop said Wednesday.

Bishop Donald J. Kettler said he anticipates filing for Chapter 11 bankruptcy protection within five weeks.

"I am legally and morally bound to both fulfill our mission and to pursue healing for those injured," he said in a prepared statement.

More than 150 claims were filed against the Roman Catholic church, alleging abuse by clergy or church workers between the 1950s and 1980s. The plaintiffs' lawyer Ken Roosa said 135 of those cases are still pending.

Negotiations have been ongoing with lawyers in the remaining cases since last summer, Kettler said.

"While filing for reorganization is not my first choice, I believe that at this time this is the best way to bring all parties together and to provide for fair and equitable treatment of all who have been harmed."

However, he said settlement talks have failed because its main insurance carrier has not participated meaningfully in the process. The insurance carrier was identified as CNA.

Kettler also cited high legal expenses as a reason for seeking bankruptcy protection.

Roosa said bankruptcy protection should help speed the process of getting his clients what they fairly deserve. Now, instead of pursuing the cases in state and federal courts, everything will be pulled together into one court, he said.

"It was clear to an objective observer that this was going to happen. We embrace it," Roosa said.

He said he does not know what the diocese's assets may be worth because he has never been provided with that information.

Kettler said only eight of the 46 parishes within the diocese are financially self-sufficient, requiring the diocese to rely on the generosity of donors.

Robert Hannon, chancellor and special assistant to the diocese, said quite a few of the cases were uninsured because the abuse took place decades ago.

"We didn't have this kind of insurance coverage that protects us against these kinds of actions," he said.

Hannon said the diocese's three other insurance carriers participated in the mediation process, but not CNA. The company could not immediately be reached for comment.

Barbara Dorris, outreach director for SNAP, the Survivors Network of those Abused by Priests, said the bishop is trying to avoid having to disclose in court "how much he knew and how little he did about pedophile priests, nuns, seminarians and other church employees."

"Instead of fostering healing, he's delaying it," she said in an e-mail to The Associated Press.

In November, a Roman Catholic religious order agreed to pay $50 million to more than 100 Alaska Natives who alleged sexual abuse by Jesuit priests. The settlement with the Oregon Province of the Society of Jesus was the largest one yet against a Catholic religious order.

However, the cases did not include those against the Diocese of Fairbanks, which owned and managed the churches in the villages in rural Alaska where the Jesuit priests were assigned.

The Fairbanks diocese is the nation's largest geographically, extending to more than 400,000 square miles. It is the only diocese in the United States to fall under the Catholic Church's missionary wing.


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