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	Fight over San Diego Diocese's Worth Expected By Allison Hoffman North County Times [San Diego CA] March 1, 2007 http://www.nctimes.com/articles/2007/03/02/faith/17_54_333_1_07.txt The Roman Catholic Diocese of San Diego's decision to file for bankruptcy protection rather than proceed with the first trial on allegations of sexual abuse by its priests is likely to set off a fierce battle over just how much the diocese is worth. San Diego is the fifth U.S. diocese to enter Chapter 11 bankruptcy under the shadow of civil claims over sexual abuse. With about 1 million parishioners and holdings throughout San Diego County, it is by far the largest and, by all accounts, the wealthiest of the group. Attorneys for more than 140 plaintiffs say they believe a fair settlement would be around $200 million, a record amount for such a case. It also is more money than the diocese is worth, according to documents church officials filed Wednesday with a federal bankruptcy court. "A big issue is going to be whether the diocese accurately represents what assets it has," said Frederick Naffziger, a business professor at Indiana University, South Bend. "The parties aren't going to sit around and sing 'Kumbaya' they'll sing 'Smite Thy Enemy."' should be on the table for victims. The diocese claimed $156 million in assets and about $100 million in debts and other liabilities. Among the assets were a $60.8 million high school complex, $6.3 million headquarters and $11.4 million cemetery. Hundreds of other assets such as parking lots and apartment buildings that are worth millions of dollars were listed as belonging to individual churches, while other items including art and furnishings were said to have "unknown" value. In other church bankruptcies, courts have found that parish properties may be considered part of a diocese's assets for purposes of determining settlements. The San Diego diocese, which covers two counties, has 98 churches. The bankruptcy filing late Tuesday halted proceedings in the civil lawsuits, including one scheduled to begin Wednesday in San Diego. In a letter posted on the diocese's Web site, Bishop Robert H. Brom said the diocese decided to declare because any damages awarded in early trials could deplete resources and leave nothing for other victims. Diocesan officials and lawyers for the plaintiffs failed to reach a settlement during two days of negotiations that ended Monday in Los Angeles Superior Court. Micheal Webb, the diocese counsel, said that even if a settlement had been reached, the diocese may have proceeded with the bankruptcy filing. Attorneys on both sides said that under mediation rules they could not disclose the exact dollar figures proposed in settlement negotiations. Plaintiffs' attorneys said they rejected the diocese's final offer in part because they were not given any indication of the church's ability to pay. Ray Boucher, lead attorney for all the San Diego plaintiffs, said after reviewing the bankruptcy filing he believes the diocese has sufficient assets to cover a "fair and just" settlement. "We think there are a significant number of properties that are undervalued, and there are significant amounts of nonessential properties that would be more than sufficient to cover a fair resolution of these cases," Boucher said. Webb declined to comment on the asset valuations in the filings, saying he had not been involved in the accounting side of the bankruptcy proceedings. Chuck Zech, an expert in church finance at Villanova University, said that because the church is exempt from taxes, properties often escape assessment by local authorities and require outside appraisal to determine their true value. "These numbers are a bare minimum on how much they're worth," Zech said. "The dioceses keep everything real close to the vest." A support group for abuse victims rallied outside a downtown San Diego church Wednesday, calling on Brom to continue settlement negotiations despite the bankruptcy filing. David Clohessy, national director of the Survivors Network of those Abused by Priests, said Brom should "show by his physical presence that he wants these issues resolved." The other dioceses that have filed for bankruptcy protection are Davenport, Iowa; Portland, Ore.; Spokane, Wash.; and Tucson, Ariz. Tucson has emerged from bankruptcy protection, while proposed settlements are awaiting final approval in Portland and Spokane. In January, the Spokane diocese agreed to pay at least $48 million, shortly after the Archdiocese of Portland filed a bankruptcy reorganization plan that would pay about $75 million to settle nearly 170 claims of priest sex abuse. Other large settlements include the Archdiocese of Los Angeles, which last year agreed to pay $60 million to settle 45 claims. The Diocese of Orange County paid $100 million to 87 claimants in 2005, and the Archdiocese of Boston paid $85 million to 552 claimants in 2003.
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