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

Association of Parishes nears end of service

the Inland Register

(From the Jan. 17, 2008 edition of the Inland Register)

Robert Hailey (left) and Father Michael Savelesky, Co-Chairs of the Association of Parishes, review documents from one of the diocese’s 82 parishes, filed in the diocese’s bankruptcy case. Boxes of documents (background) were provided to the bankruptcy court as evidence that parishes as unincorporated associations held equitable interests in the properties on which they had built churches, schools, offices and rectories, even though the Catholic Bishop held legal title to those properties. Federal Judge Justin Quackenbush ruled on appeal that this evidence entitled the parishes to a full trial before the Bankruptcy Court in order to finally determine whether or not these properties should be treated as Diocesan assets that could be liquidated to pay diocesan creditors. His decision was a key moment in bankruptcy proceedings, giving the parishes significant voice in eventual mediation. (IR photo by Deacon Kelly Stewart)

The Dec. 31, 2007 deadline came – and it was met. With the payment to the Plan Trustee of every penny of their collective $10 million contribution to the diocese’s $48 million bankruptcy settlement sum, the 82 parishes and missions in the Diocese of Spokane satisfied their collective commitment to the implementation of the court-approved Plan of Reorganization in the Diocese of Spokane’s bankruptcy case.

Since just last May, the parishes have arranged to pay $8 million of that sum as the result of a recent Chapter 11 Settlement Campaign, “From Justice to Healing and Renewal.” Fifteen parishes joined together to borrow the remaining $2 million to complete their payment to the Plan Trustee. These parishes found a willing and cooperative lender in American West Bank, a local financial institution whose interests lie in the welfare of the Spokane community.

The success of the fund-raising campaign is described by Robert Hailey, co-chair of the Association of Parishes, as nothing short of a miracle. “Even a year ago no one would have anticipated the generosity and sacrifice of the People of God in responding to this need,” he said. “Given the circumstances in our diocese and the ‘content’ of a campaign of this nature, the solicitation of the assistance of a professional fund-raising firm fell short. We had to go it alone. And on their own, the People of God have given practical expression to their faith.”

The Association of Parishes was co-chaired by Hailey and Father Michael Savelesky, pastor of Assumption of the Blessed Virgin Mary Parish, Spokane. In the course of the diocese’s bankruptcy proceeding, the organization gave in defense of the temporal goods of parishes.

Every parish and mission in the diocese has held membership in the Association since the autumn of 2004. The AOP has received legal assistance from bankruptcy attorneys Ford Elsaesser, John Munding and Barry McHugh, who have served on the basis of pro bono and/or reduced professional rates. Although these attorneys had standing in the bankruptcy case – and, therefore, could have justified payment for services as part of the bankruptcy case – the parishes themselves paid their own legal expenses on a pro-rata basis. According to AOP officials, the total expense for the three years of legal services from the three attorneys was less than $600,000 – very little compared with the nearly $10 million allotted in the bankruptcy settlement for attorney fees and processional expenses.

Acknowledging the service of their attorneys, the co-chairs of the Association wrote in a special public advertisement, “Faced with the reality of bankruptcy, parish leadership found it necessary to mount a defense of the temporal goods of their communities. What a God-send these three highly skilled attorneys have proved to be! Blessed with compassion for the wronged, they also were equally committed to the pursuit of justice and fairness.”

“These attorneys have guided the parishes in finding a way to help assure just compensation for victims of sexual abuse,” wrote the chairmen. “At the same time they have helped guarantee the continued mission of the Catholic Church in our Diocese. Grateful as we are at the moment, history will show the full impact and critical importance of their service.”

The Association of Parishes was created at the initiative of the pastors and parish administrators of the Diocese on Oct. 28, 2004. Virtually every parish and mission in the Diocese was represented by its respective pastor and a lay representative. According to the Charter of Responsibilities subsequently adopted by the members, a decision for its dissolution must be made by the same individuals.

Given the end of the bankruptcy case – and the need for legal defense of associated issues of property ownership – the decision currently is pending. Hailey and Father Savelesky soon will place a vote for dissolution before the membership of the Association.

Hailey and Father Savelesky give voice to an impressive list of AOP accomplishments:

• Insistence on the fair and equitable treatment of all victims of sexual abuse.
• Preservation of collaboration among parishes and unity with our bishop.
• Legal recognition of parishes as “unincorporated associations.”
• Establishing legal corporate identity for each parish entity.
• Clarification of legal ownership by parishes of their own property and temporal goods.
• Clarification of context for future legal action against the Diocese and/or sister parishes.
• Recognition that parishes operate according to Canon Law, even if they are civil legal entities.
• Restoration of deposits in the diocesan Deposit and Loan Fund.
• Assurance that the needs of retired priests will be met.

Many of the AOP’s accomplishments are congruent with the legal position of the diocese, defended in court by its legal counsel. They all benefit the parishes and strengthen the mission of the local Catholic Church.

“We all move beyond bankruptcy, humbled by the acknowledgment of serious sin among us,” said Father Savelesky. “At the same time, we are a stronger Church. With time, we will come to see that separate incorporation – as necessary as it is for legal reasons – is not a threat to our unity or identity as a single Catholic Community.”

Both Hailey and Father Savelesky said they are “humbled by the degree of responsibility and trust given to us these past three years.” The experience “has blessed us with profound admiration of the strong faith and perseverance of the faithful in the pews of our many parishes. Without them and their moral and obvious financial support of the final bankruptcy settlement, we could not have arrived at the resolution of this bankruptcy case. The victims of abuse are being compensated for the harm done to them, and our parishes can continue in their responsible mission of proclaiming the Gospel of Jesus Christ and collaboration in the building the Kingdom of God.”

The service of the Association of Parishes has been a brief but critically important chapter in the history of the Diocese of Spokane. Issues related to potential future claims “impose certain limitations on parishes in Spokane County. The anticipated affirmative vote for dissolution of the Association of Parishes ends its work and files its record in the annals of history.

“The sense of Church and collaboration among the parishes – in union with our bishop – for the preservation of our Catholic patrimony has given us a vision which we all will implement for years to come,” said Hailey.

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