Action Late Tuesday Headed off Start of First Sex Abuse Trial
By Allison Hoffman
Associated Press, carried in Desert Sun [San Diego CA]
March 1, 2007
http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20070301/NEWS10/703010319/1024
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 nearly 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.
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| David Clohessy (left), national director of Survivors Network of those Abused by Priests, hugs Esther Miller (right), who says she was a victim of child sexual abuse, as she holds a quilt with photos of others who say they were abused as children by priests. Photo by Denis Poroy/The Associated Press |
"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 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.
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