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

Bishop, Association of Parishes’ leaders push for just resolution of claims

by Bishop William S. Skylstad
Robert Hailey, Lay Co-Chair, Association of Parishes
Father Michael J. Savelesky, Priest Co-Chair, Association of Parishes

(From the April 7, 2005 edition of the Inland Register)

Expressing mutual concern that just resolution of sexual abuse claims will be delayed unnecessarily by litigation over preliminary issues relating to the pending Chapter 11 bankruptcy proceedings, diocesan attorneys met March 29 with attorney colleagues representing the Association of Parishes. Representatives of the executive committee of the Association joined Bishop Skylstad and key diocesan administrators for the meeting.

The Association of Parishes was formed last October at the initiative of pastors and parish administrators who identified the need for legal representation to protect parish rights in light of the then-anticipated Chapter 11 filing by the diocese in U.S. Bankruptcy Court.

Bishop Skylstad filed for Chapter 11 Reorganization Dec. 6, 2004.

All 82 parishes in the Diocese are members of the Association of Parishes.

The Association has hired its own counsel, whose expense is shared by the parishes themselves on a pro-rated basis. Because the attorneys for the sexual abuse claimants are asking the Bankruptcy Court to declare that parish buildings and other assets are available to satisfy those claims, the Association has a significant interest in the outcome of the Chapter 11 litigation process.

As identified in the Dec. 6 filing for Chapter 11 Reorganization, the goals of the Diocese are (1) just settlements for victims of sexual abuse by priests and (2) the continuation of the mission of the Church.

Attorneys for the diocese as well as those representing the Association of Parishes recognized that legal fees for the diocese and those for the two Creditors’ Committees appointed by the U.S. Bankruptcy Court are reaching amounts which themselves could consume all diocesan liquid assets and endanger the fulfillment of these goals. According to U.S. bankruptcy law, these fees must be paid by the diocese, even before creditors such as the sexual abuse victims can be paid.

The concern of the bishop, diocesan administration and the Association of Parishes is the result of observation and logic. The assets of the Diocese of Spokane are very limited compared to the assets of other dioceses in the United States which have managed to reach settlements with victims of sexual abuse. Some of those dioceses have paid tens of millions of dollars in settlement over and above insurance proceeds – far more than this diocese could possibly afford, without compromising its mission to serve the spiritual and charitable needs of all the people in the diocese. Ironically, every month that the bankruptcy litigation continues, the compounding costs of legal fees eat away at the very assets that would otherwise be available to resolve, once and for all, the claims of all of the sexual abuse victims.

All participants in the March 29 meeting recognized that victims of sexual abuse have been wronged and that their claims should be settled. The real challenge comes in determining the terms of the “settlement package” that will fairly compensate those victims, while preserving the ability of the diocese to minister to the needs of all of its parishioners.

Although a settlement plan anticipates participation by several insurance carriers, the shape of any plan is of special concern to the diocese and the Association of Parishes because any realistic plan ultimately will have to involve financial participation by parishioners in order to obtain legal closure for the parishes as well as the diocese.

The diocese and the individual parishes would have few, if any, material assets without the many selfless contributions over the years by the people in the pew.

Because the diocese has very little cash on hand with which to fund a settlement with the victims of abuse, the reality is that the only way in which a Chapter 11 Plan of Reorganization can be fully and adequately funded so as to resolve the abuse claims and also continue the ministry of the Church in Eastern Washington will be through the voluntary contributions by members of the diocese’s 82 parishes over a period of several years.

For a variety of reasons — including donor intent and principles of Constitutional law, Federal law, Washington State law and Canon Law — the Association of Parishes asserts that the buildings and other assets of the individual parishes cannot be used to satisfy claims against the diocese. The diocese agrees.

The attorneys for some of the sexual abuse claimants have taken the position that virtually all of the property now owned by parishes, schools, cemeteries, and charitable organizations within the boundaries of the Diocese of Spokane are “fair game” for liquidation by creditors. The result is that, while attorneys for the Association and the diocese believe that the Association will eventually prevail in court, the litigation process will take many months – if not years – to conclude.

Meanwhile, the uncertainty about the outcome will make it difficult, if not impossible, to design a workable Plan of Reorganization for the diocese.

More importantly, preservation of material assets should not be the ultimate goal of the Church, or its members. The ultimate goals of the People of God – the people in the pew – are the same as the goals announced by Bishop Skylstad: to give justice to victims of sexual abuse, without compromising the ability of the Church to serve the spiritual and charitable needs of all the people in this diocese.

Participants in the March 29 meeting recognized that dissipation of assets simply to pay bankruptcy litigation costs accomplishes neither of those goals, and they acknowledge that this view is shared by the people in the pew, who want an end to litigation, so that a just resolution is reached for the victims of sexual abuse and that the work of the Church can continue uninhibited.

Of course, the bishop, his advisors, and the Association of Parishes also recognize that a prompt and just resolution of all sexual abuse claims, including those that have not yet been filed, cannot be accomplished without the active cooperation of the claimants and their counsel. To that end, attorneys for the diocese and the Association of Parishes have pledged to renew their efforts to minimize the dissipation of financial resources on bankruptcy litigation and administration, and explore as soon as possible with plaintiffs’ counsel avenues for settlement that will justly compensate the victims of past sexual abuse by priests, without undermining the mission of the Church.

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