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 CNS Story:

DIOCESES-BANKRUPT Nov-24-2004 (820 words) xxxn

Judges set filing deadlines in diocesan bankruptcy cases

By Catholic News Service

PORTLAND, Ore. (CNS) -- Federal bankruptcy judges in Portland and in Tucson, Ariz., have set April 2005 deadlines for victims of childhood sexual abuse by Catholic clergy in those dioceses to submit claims.

Both judges approved media notice campaigns that would invite additional victims to come forward before the deadlines.

In Portland, however, Judge Elizabeth Perris also ruled that victims who are aware of having been abused will not be limited by the court-set deadline if they have not yet recognized the personal damage caused by the abuse.

The Portland Archdiocese, facing lawsuits by more than 60 plaintiffs seeking more than $300 million, filed for bankruptcy protection July 6 under Chapter 11 of the U.S. Bankruptcy Code.

The Tucson Diocese made a similar filing Sept. 20. It faces lawsuits by 33 plaintiffs who seek millions of dollars for claims of childhood sexual abuse by church personnel.

On Nov. 10 the Diocese of Spokane, Wash., announced plans to invoke Chapter 11 protection after attempts to mediate the claims of some 125 alleged victims broke down. In late November the diocese moved its target date for filing from Nov. 29 to Dec. 6.

Chapter 11 sets out a procedure by which a federal bankruptcy judge oversees the reorganization of a corporation in a way that provides equitable settlement of debts and other claims against it within its financial means. One goal of a Chapter 11 proceeding is to let the corporation remain in business instead of liquidating all its assets and dissolving itself, as it would have to do if it declared bankruptcy.

In a ruling Nov. 19, Judge Perris set April 29 as the date after which no new claims can be filed. She exempted those who are still minors, those who have blocked memory of the abuse and those who are aware of the abuse but have not realized a possible connection between the abuse and personal problems such as mental illness or substance addiction.

A Portland archdiocesan insurer that refuses to pay settlements called the judge's inclusion of people who remember the abuse but have not yet connected it with personal damage a "radical departure" from usual court practice.

Observers regarded the ruling as a potentially serious setback for the Portland Archdiocese, since one of the main goals of its Chapter 11 filing was to resolve liability for claims of past abuse. Archdiocesan lawyers had sought to limit post-deadline claims to individuals who are still minors or who have blocked out all memory of the abuse.

Perris also opened the door to possible punitive damages against the archdiocese. She said plaintiffs' attorneys could review archdiocesan files on 37 priests publicly identified as subjects of sexual abuse claims and interview people to build a case for a possible claim of a pattern of past negligent behavior on the part of archdiocesan officials.

To help move the bankruptcy proceedings forward, she directed the 60 current abuse plaintiffs and the archdiocese to begin mandatory mediation.

She approved the archdiocese's proposal for an ad campaign to alert victims who have not yet done so that they must come forward by April 29.

Notices will be posted on various Web sites and published in West Coast newspapers, The Wall Street Journal, USA Today and church publications, and the archdiocese will send a mass mailing to some 80,000 Catholic households.

The estimated cost of that campaign is about $300,000. Perris rejected a multimillion-dollar proposal by plaintiffs' attorneys that would have included television ads with photos of accused priests.

Perris will not rule until early next year on one of the most crucial issues in the case, the extent of the archdiocese's assets.

The archdiocese says that under church law the assets of each parish belong to the parish, held in trust for the parish by the archbishop. It claims that archdiocesan assets are less than $20 million. Plaintiffs' attorneys claim the parish properties are also part of the archdiocese's assets, a position that would increase the archdiocese's total net worth to about $500 million.

In Arizona Nov. 5, Judge James M. Marlar set an April 15 deadline for filing any clergy sexual abuse claims against the Tucson Diocese. He approved a five-page form proposed by the diocese inviting victims to file claims and informing them how to do so.

The same day the diocese posted the form in English and Spanish on its Web site, www.diocesetucson.org. It also posted along with it the names and dates and places of employment of 32 church personnel -- 28 priests, two deacons, a nun and a layman -- "about whom the diocese is aware of credible allegations of sexual misconduct involving a minor."

The form is to be published in newspapers in Tucson, Phoenix, Los Angeles and other places in the Southwest.

Marlar exempted from the April 15 deadline victims who are still minors and adults who do not yet recall having been abused as children.

END


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