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

Bankruptcy judge rules against Spokane Diocese; appeal will be filed

by Deacon Eric Meisfjord, Editor, Inland Register

(From the Sept. 8, 2005 edition of the Inland Register)

On Aug. 26, Federal Bankruptcy Court Judge Patricia Williams issued her long-awaited ruling on the issue of the Property of the Estate in the Diocese of Spokane’s Chapter 11 Reorganization proceeding.

Essentially, the judge ruled that various juridic persons – separate entities, according to canon, or church, law – such as parishes and schools belonged to the bishop of the Diocese of Spokane.

Oral arguments on the Property of the Estate issue were heard June 27 in Spokane. At the end of those arguments, Judge Williams pointed out that no matter how she ruled, she was sure that her ruling would be appealed.

The diocese announced at a press conference the afternoon of Aug. 26 that her decision will be appealed.

It has been the Spokane Diocese’s position that such properties are only held in trust by the bishop; they in fact belong to the entities themselves. The diocese’s legal arguments were based on Washington State trust law, as well as on the canon law of the Church.

The diocese’s position has been that parishes and like properties cannot be sold to satisfy judgments, because according to canon law, as well as state trust law, the bishop does not own those properties.

The position was further supported recently by the Vatican’s communications with the Archdiocese of Boston regarding use or distribution of the assets of closed parishes in that See.

Bishop Skylstad was traveling in Eastern Europe, on behalf of the United States Conference of Catholic Bishops, when Judge Williams issued her decision. Speaking for the diocese, and reading a statement from Bishop Skylstad, was Father Steve Dublinski, the diocese’s Vicar General.

In the statement, the bishop expressed his gratitude for the Judge’s work. “However, in view of the significance of this decision, not only to the local Church, but nationally, I have instructed our attorneys to appeal her decision,” he said.

Although the ruling is not binding anywhere else, there is national impact on the Catholic community, but also other denominations and faith expressions.

Once again, the bishop acknowledged the diocese’s responsibility to victims of sexual abuse. He also bears a responsibility to Catholic communities, he said.

“We have a responsibility, not only to victims, but to the generations of parishioners – past, present, and yet to come – who have given so generously of themselves in order to build up the work of the Catholic Church in Eastern Washington,” he said. “Over 80 parish communities bear witness to the dedication, the sacrifice, and the intention of thousands of individuals and families…. Their sacrifice, their generosity, and their intent cannot be dismissed lightly…. I have a sacred responsibility and am duty bound to protect that legacy for our communities today, and in the future.”

At the press conference, Shaun Cross, one of the attorneys representing the diocese in the Chapter 11 Proceeding, explained the Appeals process. There might be as many as three levels of appeal now: in District Court, the 9th Circuit Court, and then the Supreme Court.

Spokane is one of three dioceses in the United States that have filed for Chapter 11 Reorganization. The Diocese of Tucson is completing its Chapter 11 now (“Tucson bishop feels ‘blessed’ by those who resolved sex abuse claims,” IR 7/28/05).

One analysis of the Tucson situation suggested that an appeals process there might take as long as nine-and-a-half years, said Cross.

In the meantime, the diocese has 45 days to file a reorganization plan. According to Cross, that plan is already in process.

At this time, no one knows exactly what the liquidation value of Spokane parishes, schools, and other entities might be.

As a non-profit, the diocese cannot be forced to liquidate, according to civil law.

Bishop Skylstad wrote, “let me assure everyone that ministry will continue in Eastern Washington. Our parish schools will continue to educate, forming children in the Catholic faith and tradition. Our parish communities will continue to celebrate the sacraments, to comfort the sick and the dying, to celebrate births and marriages, to welcome newcomers as they journey in faith. We will continue to gather as Christ has asked us to gather, in his name, and we do so in the sure and certain knowledge that where one or two of us come together in his name, Christ is in our midst….

“We look forward to emerging from Chapter 11 Reorganization,” he wrote. “We look forward to a brighter future, a future in which children and vulnerable adults are safe and protected; in which ministry is conducted in a safe environment; a future in which we can continue to do God’s work in service to the people of Eastern Washington.”

(Bishop Skylstad’s full statement can be read on the Communications – News and Announcements section Spokane Diocese’s web site. The judge’s ruling has been posted as well:

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