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OREGON-DEFENDANTS Jul-29-2005 (540 words) xxxn
Western Oregon Catholics named defendants in bankruptcy case
By Ed Langlois
Catholic News Service
PORTLAND, Ore. (CNS) -- About 80,000 Catholic households in western Oregon will soon get notice that they have been named defendants in the Archdiocese of Portland's bankruptcy case.
The legal move emerged as a way to make progress on a central question of the case: Who owns Catholic parishes and schools? Catholic households are to be notified of the action this summer by mail and newspaper ads.
Both the archdiocese and the committee representing scores of sex abuse plaintiffs agreed to the plan.
No parishioner or church donor will need individually to pay sex abuse claims if their side loses the class action suit. But they could see their parish or school assets sold or put up as collateral for loans to fund settlements.
U.S. Bankruptcy Judge Elizabeth Perris July 22 approved the move, which will formally include more than 389,000 Catholics in the yearlong bankruptcy process.
The archdiocese, plus an independent group that includes 75 parishes, have long maintained that the parishes and schools own their assets.
Last July, when he announced the archdiocese was filing for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code, Portland Archbishop John G. Vlazny explained that church law forbids him from seizing parish property.
The handful of attorneys representing abuse plaintiffs counter that the archdiocese owns the parishes in western Oregon the way a company owns subsidiaries. That would mean the parish and school assets could be added to the archdiocese's estate, significantly driving up settlement amounts for those judged to be victims.
The archdiocese now tallies $19 million in assets. The estimated value of the 124 parishes and three Catholic high schools disputed in the case is about $500 million.
A single plaintiff last year sued the archdiocese for $135 million. That is what moved Archbishop Vlazny to file for bankruptcy. He said he hoped to safeguard enough funds to give all victims a fair settlement while preserving church ministries such as education, outreach to the poor and worship. Perris accepted three lay men and three pastors who will represent the class in court.
The three archdiocesan high schools are not part of the class of defendants. They are individual defendants in the property case.
On July 27, the court held hearings to lay ground rules for an upcoming deposition by San Francisco Archbishop William J. Levada, who was recently named prefect for the Vatican's Congregation for the Doctrine of the Faith.
Archbishop Levada headed the Portland Archdiocese from 1986 to 1995, when he was named to San Francisco.
Lawyers for sex abuse plaintiffs have sought to include Archbishop Levada in the archdiocese's year-old bankruptcy case.
Meanwhile, Archbishop Vlazny in early July sought to correct reports in the secular media that he said unfairly portrayed the archdiocese as a "bully" in a related dispute with insurance companies. The archbishop again called for caring for sex abuse victims and for a good policy protecting people from abuse.
"Even if we never set the record straight in the public forum, we will be much more uncomfortable on Judgment Day if the real record shows we were not truthful, compassionate and responsible in our outreach to victims and our care of children," he said.
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Copyright (c) 2005 Catholic News Service/USCCB. All rights reserved.
This material may not be published, broadcast, rewritten or otherwise distributed.
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