Creditors File Suits in Portland to Recover $3.1 Million Paid out before the Jesuits Declared Bankruptcy

By Lynne Terry
The Oregonian
February 18, 2011

Lawyers representing a group of people who accuse Jesuit priests of sexual abuse filed 37 lawsuits Thursday in the bankruptcy involving the region's Jesuits, asking for about $3.1 million.

The lawsuits, filed in U.S. Bankruptcy Court in Portland, claim that the regional order paid out money to various entities before declaring bankruptcy two years ago and that that money should actually be part of the order's assets.

Some of money went towards training priests and other funds were spent on faculty and student tuition at a time when abuse victims were seeking millions in dollars in damages against the order, said James Stang, a lawyer representing a creditor's committee that brought the lawsuits.

Stang said the suits do not contend that the Jesuits were trying to protect their assets from abuse claims.

"I don't think this is a hiding issue," he said. "It's not illegal. This is what Jesuits do. They support education. That's a fine thing to do, when you're not insolvent."

The region's Jesuits, a Roman Catholic order formally known as the Oregon Province of Society of Jesus, filed for bankruptcy on Feb. 17, 2009 in the face of sex-abuse lawsuits brought against Jesuit priests. Between 2001 and early 2009, the order settled more than 200 legal claims, paying out $25 million.

The creditor's committee, made up of seven abuse victims representing the interests of accusers, had two years to bring the claims in the bankruptcy proceedings. Some of the suits were filed hours before the deadline at the end of the day on Thursday.

The lawsuits were brought against a range of groups, from a prep school to universities and from a funeral home to a magazine. Although they stretch across the country to Boston, many are located in the Northwest.

The smallest suit, for about $17,000, was brought against Jesuit Volunteers Corp. in Oregon and the largest, seeking about $320,000, was filed against MBK Senior Living centers in Washington and California.

Gonzaga University, a prestigious Jesuit institution in Spokane, Wash., was named in a suit seeking about $232,000 while Jesuit High School in Beaverton was named in another, for nearly $31,000.

The high school, known for its college-prep program and athletics, said in a statement that the lawsuit has "nothing to do with sexual abuse or fraud."

"Jesuit High School contends that those claims are completely without merit," the statement said. "Jesuit High School's assets are not at risk in any way due to the Oregon Province's bankruptcy proceeding or this latest claim by the creditors' committee. We will remain a fiscally healthy institution committed to educating young men and women in the Jesuit, Catholic tradition."

The order, which covers Oregon, Washington, Idaho, Alaska and Montana, would not comment on the lawsuits, saying in a statement that its affairs were tied up in Chapter 11 bankruptcy proceedings.

When the order filed for bankruptcy, it faced more than 150 lawsuits alleging priest abuse. There are now more than 500 people seeking compensation for having suffered a lifetime of pain.

Stang said that some of the lawsuits might be settled out of court while others could end up being litigated.

"We want the money back," he said. "We will start a dialog with the defendants. They'll give us the reasons why they think we're wrong. We'll get them resolved or we'll pursue them towards trial."


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