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
Approval of Disclosure Statement a ‘huge milestone’ toward resolution of Chapter 11 Reorganization
by Mitch Finley, Inland Register staff
(From the March 22, 2007 edition of the Inland Register)
On March 8, 2007, an important step was taken on the road for the confirmation of the consensual plan filed earlier this year with the bankruptcy court and for the Diocese to emerge from the Chapter 11 bankruptcy process.
“In order to confirm a plan of reorganization, which is the ultimate goal of any Chapter 11,” said Shaun Cross, the diocese’s attorney, “you have to have all of the creditors vote on your proposed plan. In order for them to vote on the plan, they need to have sufficient information to make an informed decision. That information is contained in a document called a disclosure statement which is provided to all creditors and claimants who are entitled to vote on the proposed plan.”
On March 8, the bankruptcy judge for the diocese, Judge Patricia Williams, approved the Diocese of Spokane’s Disclosure Statement.
“That is a very critical point in reaching a confirmed plan and emerging from bankruptcy,” said Cross. “It’s a huge milestone. It’s the result of a lot hard work that all the attorneys have been engaged in for the two creditors’ committees, for the Association of Parishes, for the future claims representative, and for the entire diocese during the months of January and February.”
The diocese filed the Consensual Plan on Jan. 4, which was the successful result of the mediation – namely, that all of the parties reached an agreement. “But then we had to go through this confirmation process to make that become a reality,” Cross said. “So approval of the disclosure statement is the first big step in that. The disclosure statement itself is described in a very complicated document.”
Basically, “the total settlement is $48 million, and out of that total just a little over $20 million is coming from insurance companies,” said Cross. “All of those settlements with the insurance carriers were approved by the bankruptcy court on Feb. 16. That’s a very noteworthy event that has not been broadcast widely to the public. That leaves $28 million that is to come from non-insurance sources. Of that amount, approximately $6.5 million will come from Catholic-related entities which are participating in the plan and receiving releases as part of the settlement. Approximately $5.5 million is coming from the sale of diocesan assets – the Chancery, the bishop’s home, and some farm and undeveloped property. –Another $10 million is coming from the parishes through a campaign and financing. The remaining $6 million is from the diocese.
On March 15, a Notice of Approval of the Disclosure Statement was filed.
Both the Disclosure Statement and the Plan of Reorganization have been posted on the Spokane Diocese web site: http://www. dioceseofspokane.org, along with numerous other documents regarding the Chapter 11 proceeding.