Associated Press, carried in Arizona Daily Star [Tucson]
April 12, 2007
http://www.azstarnet.com/metro/178058
A federal bankruptcy judge on Wednesday released Tucson attorney Susan G. Boswell from possible contempt of court, but ordered an external audit of the finances of her client, the Roman Catholic Diocese of San Diego.
Bankruptcy Judge Louise DeCarl Adler also criticized diocese attorneys for what she described as a lack of transparency in presenting their finances to the court.
Boswell says a misunderstanding led to claims that she appeared to conspire with the diocese in an attempt to shift money to parishes without court approval.
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| Susan Boswell also represented Tucson Diocese |
In a response filed in the U.S. Bankruptcy Court for the Southern District of California, Boswell and officials with the Diocese of San Diego said they had no prior knowledge about a memo sent out by the newly formed Organization of Parishes that encouraged parishes to obtain new taxpayer-identification numbers.
Boswell, the lead attorney for the San Diego diocese, also represented the Roman Catholic Diocese of Tucson during its bankruptcy proceedings.
"Credibility is at the core of what the Roman Catholic Bishop of San Diego stands for and, in the reorganization case, it is most critical that the court be satisfied — because only the court can and will permit the debtor's successful reorganization," Boswell's response says. "Both the debtor and its counsel have attempted to act credibly in prosecuting the debtor's reorganization; and there certainly has not been any intentional or material misstatement to the court."
The response was filed in reaction to a court order on Monday from Adler that Boswell and lawyers for the San Diego diocese's parishes and the Organization of Parishes appear in court Wednesday "to show cause why you should not be cited for contempt of court."
In her order, Adler said the Organization of Parishes encouraged parishes to set up new bank accounts by obtaining new taxpayer-identification numbers and attempted various strategies to transfer money the diocese was apparently holding for its 99 parishes to those new accounts.
The San Diego diocese, which includes nearly 1 million Catholics, on Feb. 27 became the fifth Catholic diocese in the United States to file for Chapter 11 bankruptcy protection in the face of potentially expensive litigation over allegations of sexual abuse by clergy members.
In addition to the Tucson Diocese, the others that filed for bankruptcy were the Archdiocese of Portland, Ore.; the Diocese of Spokane, Wash.; and the Diocese of Davenport, Iowa.
Tucson's was the second diocese in the nation to seek Chapter 11 protection in September 2004, and the first to emerge from bankruptcy one year later.
Contact reporter Stephanie Innes at 573-4134 or at sinnes@azstarnet.com.
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