Catholic Diocese of Spokane, Washington



The Bishop Writes

"Updating the Chapter 11 situation"


by Bishop William S. Skylstad

(From the July 6, 2006 edition of the Inland Register)

The Catholic Diocese of Spokane has been in Chapter 11 bankruptcy protection proceedings for the past 18 months. I last wrote on this topic several months ago. I believe it is important to share with you the latest information on the progress of this litigation. And there has been considerable progress.

The Catholic Diocese of Spokane has been in Chapter 11 bankruptcy protection proceedings for the past 18 months. I last wrote on this topic several months ago. I believe it is important to share with you the latest information on the progress of this litigation. And there has been considerable progress.

First, however, let me repeat that our primary concern in this whole matter is to address the situation of the victims and how to achieve justice for them. They have been hurt. Trust has been broken. Healing and reconciliation are crucial considerations. As we travel this very expensive journey, I hope no one in our diocese will blame the victims. The fact is, that attitude only makes the situation worse, and in a very real sense, further victimizes these very wounded people.

Secondly, the mission of the Catholic Diocese in Eastern Washington also is precious and valuable to us – indeed, that mission is a matter of good and responsible stewardship.

Third, to the very best of our ability, we must make sure that sexual abuse will never occur again. Already in place are codes of conduct, safe environment training, and protocols for handling abuse when it occurs. This is no small matter. As we make certain that ministry occurs in within the context of a safe environment, the demands on ministers and volunteers are considerable.

As I said, there have been several important areas of progress.

First, we have settlements with five of our six insurance carriers. Those settlements now total about $19.5 million. A final settlement with a smaller carrier will, in all likelihood, boost that total to over $20 million. Along with the insurance settlement money, we have about $8 million in diocesan assets, including the Chancery Building, where the Catholic Pastoral Center is located; the bishop’s house; and some farm property.

Several of our Catholic organizations will participate in funding the bankruptcy in order to participate in the outcomes of the bankruptcy through channeling orders – a bar to claims in the matter and release of liability by all litigants. That funding will come to about $7 million.

Our diocesan resources will be exhausted. If any additional monies are needed for the final settlement, I will have to ask for the financial support of the parishioners. At this point in time, that amount is unknown, although there is certainly a limit to what parishes can contribute to a feasible final plan.

The second area of progress has been the decision of Judge Quackenbush on June 15 regarding the question of the ownership of parish properties. As I have insisted all along, I do not own the parishes, but rather, I hold them in trust. One clear example of how that concept unfolds was the closing and sale of St. Benedict Parish in Coulee Dam several years ago. The money from the sale of the parish property was transferred over to St. Henry Parish, across the Columbia River in Grand Coulee. Those funds helped pay for a much-needed parish social hall there. The assets followed the parishioners. Judge Quackenbush’s ruling was not only helpful to us, but also sends a good message to the whole country as to how we look at parish property in the Catholic Church.

The third very significant area of development is the mandated mediation among all of the parties involved in the Chapter 11 process. A single day of mediation with retired Federal Bankruptcy Court Judge Zive of Reno will be held in that city on July 7, and possibly the next day as well. The full week of Aug. 21 has been set aside for mediation with Judge Zive in Spokane.

There are five parties in this mediation process. There is the Tort Litigants Committee, representing the 75 victims to whom my offer was made on Feb. 5); the Tort Claimants Committee, which as yet represents an unknown number, but probably in the range of 60 or 70 individuals; the Future Claims’ Representative, for any victims who only in the future come the realization of damage because of sexual abuse; the Association of Parishes, representing interests of the parishes, and finally, the Catholic Diocese.

The process of mediation will be very complex. Both Judge Williams and Judge Quackenbush have pushed very hard for mediation that will happen quickly and, I hope, will bring this whole affair to conclusion, with a consensual plan that will lead us out of bankruptcy into a more stable financial future. It is very clear that when all is completed, we will have much more limited assets with which to support ministry in the Church. But our mission will continue, and I strongly believe we will be better and stronger as a community of faith. Planning for that future is already taking place. At our Diocesan Pastoral Council meeting this past week, we discussed our diocese’s future and how we will continue to address our important mission of being Church, of proclaiming the Gospel.

Finally, I know emotions run high in this complex situation in which we find ourselves. In decisions that are made about complex matters, I hope that we will stay away from any kind of gloating when we hear a decision with which we agree. I have constantly called all of us to take the high road in relationships and in conversation that is respectful and humble. I know Jesus expects no less of us.

Please pray for a successful and quick resolution of this sad yet important chapter in the history of our diocese. I must tell you that in a certain way, I feel a sense of freedom and gratitude that victims have come forward. They have been hurt. We need to acknowledge that and to the best of our ability make it right. Each day I pray for those abused, for the abusers, and for all us as we progress to the fullness of God’s kingdom. 

Blessings and peace to all.


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