Catholic Diocese of Spokane, Washington
Official News Magazine of the Diocese of Spokane
P.O. Box 48, Spokane WA 99210
(509) 358-7340; FAX: (509) 358-7302
Spokane Diocese files for Chapter 11 Reorganization
Story and photo by Jami LeBrun, Inland Register staff
(From the Dec. 16, 2004 edition of the Inland Register)
Right: Bishop Skylstad and Spokane attorney Shaun Cross addressed the media during a Dec. 6 press conference at the Catholic Pastoral Center, announcing that the Spokane Diocese had filed for Chapter 11 Reorganization. (IR photo)
At 1:15 p.m. on Monday, Dec. 6, the Catholic Diocese of Spokane filed for Chapter 11 Reorganization.
Bishop William Skylstad made the move public at a press conference at 3:30 that afternoon.
Spokane is the third diocese to file for Chapter 11 Reorganization. The Archdiocese of Portland, Ore., and the Diocese of Tucson, Ariz., also have filed this year.
Bishop Skylstad said that 125 potential victims of sexual abuse have been identified by the diocese. Half of them have retained legal council and are filing claims against the diocese. The total of those claims is in the tens of millions of dollars, far outweighing the worth of the diocese.
Bishop Skylstad stressed that the decision to file for Chapter 11 Reorganization was made in the best interest of all parties. He said he hopes that the filing will help the diocese to fulfill its responsibility to victims of abuse by providing “fair, just and equitable” treatment for all victims, as well as allow the Spokane Diocese to continue its mission and ministry to the people of Eastern Washington.
“Chapter 11 means that all victims can be brought to the same stage, regardless of when the claim was discovered or where it is in the claims process,” said Bishop Skylstad.
Until Monday, victims of abuse were treated on a “first come, first served” basis. Whoever filed valid claims first would receive compensation until, perhaps, the diocese was left with no assets with which to compensate other valid claims. The Chapter 11 process lets all claimants make their claims at the same time, to be treated equitably.
Diocesan attorney Shaun Cross, of the firm Paine, Hamblen, Coffin, Brooke & Miller, explained the breakdown of diocesan assets and liabilities.
The diocese’s assets range from properties such as the Catholic Pastoral Center building, the bishop’s house, and Bishop White Seminary, to household goods, computers, filing cabinets and cars, and even employee vacation time, as well as some protected endowment funds – the total reaching $11.1 million. Liabilities total $81.3 million. Approximately $75 million of the total liabilities are the projected cost of sexual abuse claims.
Parish and school properties in the diocese are not listed as assets. Cross said that these properties are held in trust in the bishop’s name and function as individual entities. Diocesan attorneys are working to ensure the safety of all parish and school properties throughout the Chapter 11 proceedings.
Some victim advocates have accused the diocese of utilizing Chapter 11 Reorganization as a ploy to avoid court and “continue 70 years of cover-up.” The accusation is patently false, as stated by both Bishop Skylstad and Cross during the press conference.
“Chapter 11 does provide that those claims can be heard in the form of a jury trial in court,” if that is the wish of the claimant, said Cross.
“We have always strived for transparency,” said Bishop Skylstad, “and we will continue to do so throughout this process.”
Chapter 11 Reorganization is widely viewed as one of the most transparent legal procedures in the United States.
The Chapter 11 filing turns diocesan finances over to the federal bankruptcy court. All future financial decisions – from paying the 41 diocesan employees to cutting a check to Avista Utilities for power expenses – must be approved by the court.
In addition, the diocese has created a section of its web site – http://www.dioceseofspokane.org – where updates and other information on the Chapter 11 Reorganization will be posted.
Included in that section of the web site are the filing information from the diocese, the schedules the diocese filed with the court, the list of the 20 largest creditors, and links to other information about Chapter 11 Reorganization.
During the press conference, Bishop Skylstad said that although the diocese wants to emerge from bankruptcy as expediently as possible, he is unable at this time to “even begin to speculate on how long this will take.”