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CNS Story:
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CANADA-PROTECTION Mar-9-2005 (480 words) xxxi
Newfoundland diocese seeks bankruptcy protection from abuse claims
By Catholic News Service
CORNER BROOK, Newfoundland (CNS) -- The Diocese of St. George's has become the first Catholic diocese in Canada to seek bankruptcy protection as a result of sexual abuse claims.
Bishop Douglas Crosby of St. George's announced March 8 that his diocese took the action to help it come up with money to stave off bankruptcy threatened by $50 million in claims. The bishop said that by going into bankruptcy protection the diocese could develop a plan that would compensate the victims better than if it went bankrupt.
The stay of proceedings requested by the diocese lasts 30 days and can be extended at the court's discretion. During that time, the diocese is expected to develop a proposal for creditors. If the creditors, including the sex abuse claimants, refuse to accept it, the diocese will be automatically bankrupt, and a trustee will be appointed to liquidate its assets.
A year ago, the Supreme Court of Canada ruled that St. George's Diocese was directly and vicariously liable for claims by 36 individuals. These claims flow out of the case of Kevin Bennett, a former priest of the diocese who was sentenced in 1990 to almost 20 years in prison for sexually abusing young men over a period of two decades. Bennett served four years in prison.
After the criminal case, the victims sued the diocese and the entire Roman Catholic Church. However, the Supreme Court ruled that only the diocese could be held liable and that the victims would have to seek compensation from it. The diocese is legally incorporated in Canada as an episcopal corporation.
"No amount of money can compensate for the abhorrent taking of innocence, which is priceless," Bishop Crosby said in a statement. "We are determined to treat the victims fairly with the greatest possible value of our assets. We are asking them to work with us so that we can all move past the horror that has brought us to this place."
But Greg Stack, a lawyer representing the victims, told CBC Radio in St. John's that the move by the diocese was a stalling tactic because it temporarily stops the civil proceedings against the diocese. Last year, the diocese offered each victim between $15,000 and $150,000, which the victims rejected.
Stack, though unhappy with this action, said he looked forward to getting a clear look at the diocese's financial resources.
The small diocese based in Corner Brook has 20 parishes and 18 priests serving 32,000 Catholics in western Newfoundland. It is reviewing all its financial resources, including land holdings, loans receivable, investments and insurance coverage.
"Bishop Leonard Whitten, retired Anglican bishop of Western Newfoundland, has generously agreed to serve as an independent and external reviewer of our financial resources," said Bishop Crosby.
The diocese also said it has not resolved with its insurer whether it can look there for financial assistance.
END
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