Dan Morris-Young ,| Apr. 3, 2017, in National Catholic Reporter
(Note: Sex abuse by priests is driving ever so many dioceses in US to go bankrupt. This shows up the bright and brittle faces of the Church in US; Bright: Because they show themselves to be law abiding in paying for the damages caused to sex abused victims, as prescribed by the law; Brittle: Because many are forced to apply for bankruptcy protection, to survive.
Such bankrupcies are not reported in other countries, as in US. It only shows that other countries may not be as law abiding as the US. We reported sex abuses in India, Italy, France etc. already in our CCV. Nowhere the issue of liquidation of dioceses came up.
What is happening in US is a warning signal to the Church as a whole to take drastic steps to stop this rot at the earliest, with due concern for the perpetrators and victims. We can only pray and hope that the top command in the Church succeeds in its honest efforts. james kottor, editor).
Are parish assets immune from liquidation? That was a dominant question among those that pastors and others posed to Great Falls-Billings Bishop Michael Warfel leading up to the Montana diocese's March 31 filing for Chapter 11 bankruptcy protection, brought on by financial pressures from sex abuse lawsuits.
The diocese embraces the concept that parish assets are held "in trust," Warfel told NCR March 31, but attorneys for the currently 72 claimants caution otherwise.
"It is my understanding that the diocese will assert that some of its real estate holdings, investments and cash assets are held 'in trust' for the benefit of parishes, and are thus not available to fund a settlement or jury verdict should any case proceed to trial," Bryan Smith, an attorney representing nearly half of current plaintiffs, told NCR in an email.
"However, there does not appear to be any evidence that the parishes are separately incorporated. If the cases do not resolve in mediation, the issue of which assets are reachable in bankruptcy could be the subject of litigation," said Smith, who works for the Tamaki Law firm, which is based in Washington state.
"There has been no court ruling on which diocesan assets are available to fund a potential settlement" and which are "off limits," Smith added. "Whether the court will agree with the diocese or with the abuse survivors on that point is unclear, as it has not yet been raised — and will not be unless the parties are unable to settle the case at mediation."
The diocese filed for Chapter 11 reorganization on Friday afternoon (March 31) in the U.S. Bankruptcy Court for the District of Montana, becoming the 15th Catholic diocese to seek such protection related to sexual abuse by clergy. Two religious communities have also filed bankruptcy.
A March 31 diocesan media release described the filing as "a major step toward bringing resolution to 72 current claims of abuse of minors by diocesan priests, religious community priests, women religious and lay workers who have served in the diocese."
The legal move was done "to fulfill a pre-bankruptcy mediated negotiated agreement with known abuse survivors and the diocese's liability insurance carrier," it explained.
Diocesan officials and attorneys, representatives of Catholic Mutual Group insurance, attorneys for claimants, and at least a half dozen plaintiffs met for three days of mediation in Seattle in mid-March, according to Darren Eultgen, chancellor of the Great Falls-Billings Diocese.
A key stipulation of the bankruptcy petition, attorneys said, will be outreach via media and other fronts to surface potential other claimants. The court will set the "bar date" or deadline for new plaintiffs to come forth. That time frame is usually three to five months, sources said.Any settlement would also include a set-aside fund for potential future claims, according to the diocesan press statement.
"The recent mediation resulted in the beginning stages of general parameters of proposed settlements with the victims and the insurance carrier," the diocesan release stated.
While "details of that comprehensive agreement are still being worked on," it added, the diocese "expects that its reorganization will be expedited by the pre-bankruptcy negotiations."
Press releases from Tamaki Law and from a consortium of five legal firms jointly representing more than half of the 72 claimants both pointed out that the diocese's bankruptcy filing "automatically stays any further action in pending lawsuits against the diocese," in the words of a consortium statement.
The first cases had been scheduled for trial in July. The two comprehensive lawsuits were originally filed against the diocese in 2014.
"However, with the diocese filing bankruptcy instead of fighting each case individually, which would have taken years if not decades, abuse survivors hope that they will receive a measure of justice and accountability within a reasonable period of time," Tamaki Law attorney Vito de la Cruz said in the firm's release.
"The abuse my clients suffered at the hands of diocesan and religious order priests and nuns has caused profound suffering, hardship and despair over their entire lives," he added.
"Survivors have a need for resolution and closure," Kosnoff said. "The longer it drags on, the harder it is on them. Likewise, it is hard for the church to carry on its mission. Administrative costs are a big concern … for the diocese and claimants, depleting available resources."
Involved in sex abuse litigation against several church entities over recent years, Kosnoff singled out "overcoming the resistance of the diocese's insurance company … to honor its legal obligation to pay fair value to settle claims."
"At this time," Elsaesser noted, "the diocese has not identified any other insurance carriers that would have existed before Catholic Mutual."Nearly all the abuse allegations date from the 1950s through the 1990s.
More than 360 claimants were involved in the Helena settlement. Fewer than five hours were actually spent in court, Elsaesser told NCR. "We would like to beat that record," he said.
As was Helena Bishop George Thomas, Warfel has been lauded by Elsaesser and some plaintiff attorneys for insisting on respect and compassion for sex abuse victims.
According to chancellor Eultgen, Warfel met with abuse victims as a group and individually during the Seattle mediation period.Warfel expressed "profound sorrow and sincere apologies to anyone who was abused by a priest, a sister, or a lay church worker" in the diocesan media statement.
None "of those who have been credibly accused remain in active parish ministry," the bishop added. "In fact, nearly all of those accused are deceased."
"Reaction of pastors and the laity has been largely a kind of 'What can we do to help?' " said Eultgen. "There is a feeling of we are in this together from our smallest parishes to our biggest ones."
Great Falls-Billings' 50 parishes and 50 missions cover more than 94,000 square miles of the east two-thirds of Montana, and are home to about 38,000 Catholics, the chancellor said.
Dan Morris Young is NCR West Coast correspondent and contributes to The Field Hospital feature series.