Catholic Diocese of Spokane, Washington

From the

Official News Magazine of the Diocese of Spokane

Deacon Eric Meisfjord, Editor
P.O. Box 48, Spokane WA 99210
(509) 358-7340; FAX: (509) 358-7302

Chapter 11 Reorganization: Questions and Answers

the Inland Register

(From the Dec. 16, 2004 edition of the Inland Register)

Q. Has the Diocese of Spokane definitely made the decision to file Chapter 11 and, if so, when will the filing take place?
A: The Bishop has accepted the recommendation of the Diocesan Finance Council and other advisors to file Chapter 11. The Chapter 11 filing will take place on Monday, December 6, 2004.

Q. What will be the impact of the Chapter 11 filing on the 20 lawsuits that are currently pending against the Diocese?
A: The filing of the Chapter 11 will act as an automatic stay of all litigation against the diocese. At some point in time, it is anticipated that the lawsuits against the diocese will be removed from state court to Federal Bankruptcy Court for resolution.

Q. Under a Chapter 11, will my parish (or school) continue to operate as usual?
A. We expect that the parishes and schools within the Spokane Diocese will continue to operate as usual.

Q. Will victims be denied their right to be heard in court?
A. No. The Chapter 11 process provides for victims who want their day in court.

Q. After the filing, will my parish or school be able to withdraw funds on deposit with the Deposit & Loan Fund?
A. Since September, withdrawals from the Deposit & Loan Fund have only been permitted in three areas. First, withdrawals have been permitted for building projects that have already been approved by the Bishop and where the parish or school has funds on deposit with the Diocese. Second, withdrawals have been permitted where the organization withdrawing the funds has a positive balance in the D&L and the withdrawal is for payroll or similar operational needs. Third, withdrawals have been permitted for emergency maintenance needs. Our attorneys will be seeking an order from the Bankruptcy Court to authorize withdrawals from the D&L in the three areas mentioned above.

Q. What will happen to parish assets in the Chapter 11?
A. The position of the Diocese in the Chapter 11 will be that the Catholic Bishop of Spokane holds the parish and school real estate and facilities in trust for the benefit of those separate entities.

Q. Is the retirement plan for the employees of the parishes, schools and the Diocese subject to the claims of creditors?
A. No. The plan is a Federally qualified ERISA plan and, as such, is not subject to the claims of creditors.

Q. Will the parishes be separately represented in the Chapter 11 proceedings?
A. An association of parishes within the Diocese of Spokane has been formed, called the Association of Parishes. The Association was formed to provide a structure and forum for the consideration of issues related to the Chapter 11 filing by the Diocese. The formation of the Association was done independently of the office of the Catholic Bishop of Spokane. The charter for the Association provides that the Association will have a non-adversarial relationship with the Catholic Bishop of Spokane and that the Association will work collaboratively with the parishes to seek the common good of the mission of the church in the Catholic Diocese of Spokane.

The Association of Parishes has retained counsel to represent the members of the Association who desire to be represented. Those attorneys are J. Ford Elsaesser, Jr. of the firm of Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh, and John D. Munding of the firm of Crumb & Munding P.S. Information regarding the Association may be obtained by contacting Father Mike Savelesky at (509) 326-0144 or by e-mail at

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