Catholic Diocese of Spokane, Washington

Peace Be With You

"Update on the mediation process"

by Bishop Blase J. Cupich

(From the Dec. 2, 2010 edition of the Inland Register)

Last month, I announced that our diocese and other parties have agreed to engage in mediation regarding future claims of sexual abuse. I am grateful that all parties are coming to the table, and that the bankruptcy court has appointed competent and experienced mediators. There is no guarantee mediation will succeed, but I am convinced it offers the best chance to bring to an end an extremely painful chapter in the history of our diocese. I have summarized for you the incidents leading to the need for mediation in a sheet accompanying this letter.

Let me be clear about what I believe are my dual responsibilities in this extremely challenging process: I am fully committed to the just compensation of survivors of sexual abuse covered under the Plan of Reorganization, which set the parameters for closure of the diocese’s bankruptcy case. At the same time, I am the pastor of this local Church in Eastern Washington. As such, I am responsible for continuing its mission. I will do all I can to spare any of our parish families the trauma and distress of being displaced due to the foreclosure and sale of their churches and schools.

All parties now enter into an intense period of mediated negotiation. The effort will involve the skill, wisdom and expertise of a small group. But each and every Catholic in our diocese also can lend a helping hand by joining with me to pray for the success of this effort.

The outcome will have an impact not only on all the parishes in Spokane County, but on all the parishes in our diocese as we reach out to support one another. We must stand together, act together and pray together. To that end I ask that each parish establish an hour of weekly prayer for our success. This could be in the form of the Liturgy of the Hours, the rosary, Adoration of the Blessed Sacrament and/or petitionary prayer. I ask that pastors send me their schedules of prayer services and I will do my best to attend one each week. The dates and times of prayer services will be posted on the diocesan website as they are scheduled. Following each service, I will be available to visit with parishioners if they wish. Mediation by its very nature is extremely sensitive, and I ask your understanding when information is not appropriate to share. But I promise to provide you with regular updates and to be as open with you as I possibly can.

We are a people of faith. We know the power of prayer. Let us pray with one another that all parties work together to find a way forward in this moment of darkness and uncertainty. I am convinced that God is at work in this moment, calling us to a deeper trust in Divine Providence. I take heart in words St. John of the Cross once wrote: “When you are in darkness and cannot see anything or find a way out, then the only thing you can do is to put your hand into the hand of someone who can see and who can lead you out into the light.” That is what I plan to do. I ask you to please do the same.

Background on the Decision to Enter into Mediation

Some have asked why there is even a need for mediation. The following background may be of help.

• On December 6, 2004, the Diocese of Spokane filed for bankruptcy and submitted a Plan of Reorganization, which provided a fund of $48 million to compensate victims of sexual abuse.
• The Bankruptcy Court set March 10, 2006, as the deadline or “Bar Date” for filing of future claims for persons who have claims of sexual abuse occurring before December 6, 2004.
• Under certain conditions, a person who did not meet the March 10, 2006 Bar Date may still make a claim of sexual abuse as a “Future Tort Claimant.” The Plan defines such a claimant as a person who was not aware that he or she was abused or harmed prior to the Bar Date. Future claims can be made until 2016.
• A future claims fund was created by setting aside $1million of the total $48 million bankruptcy settlement. In the event that future claims and the awards exceeded $1million, the diocese was required to recapitalize the future claims fund so that it did not dip below $200,000.
• Given the poor state of the diocese’s finances, its settlement obligation needed to be secured, which came in the form of putting up as collateral all the real estate of the Catholic parishes and their schools in Spokane County. The exception was the parish in Deer Park.
• The diocese and the parishes agreed to this provision, anticipating that future claims would be few and manageable. This estimation was based on the belief that the Plan set forth clear criteria for awarding future claims, and that the wide-spread publicity about the bankruptcy and the appeal for victims to identify themselves would have reached most victims by the Bar Date.
• Last year, the diocese became concerned about an unexpectedly large number of future claim awards. It asked the bankruptcy court to review if these awards were being made outside of the scope of the criteria established in the Plan. The court refused to conduct this review. The diocese has appealed this refusal to the Ninth Circuit Court of Appeals.
• As the diocese continued to seek resolution of its case on several fronts, it incurred a good deal of unbudgeted legal expenses, which have seriously jeopardized its ability to carry out the Church’s mission.
• Meanwhile, the future claims fund has been eroded considerably. Besides awards to victims, the future claims fund is used to pay for costs associated with administering the fund, as well as litigation. In fact, it is anticipated that additional future claim awards will require a significant recapitalization of the future claims fund.
• As the diocese does not have such funds, the likelihood that it would soon be declared in default, thus triggering the foreclosure of one or more parishes, was growing each day.
• As it became clear that the present trajectory of events and the stalemate were unsustainable, the diocese initiated discussions leading to the decision by all parties to begin a period of mediation.



© The Catholic Diocese of Spokane. All Rights Reserved