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	Parishioners File Legal Claims in San Diego Diocese Bankruptcy By Allison Hoffman Mercury News July 26, 2007 http://www.mercurynews.com/breakingnews/ci_6471729?nclick_check=1 San Diego—A parishioners' group claiming to represent more than 1 million Catholics asked a federal bankruptcy judge Thursday to prevent churches, schools and charitable missions from being closed or sold to settle sex-abuse allegations against the San Diego diocese. "We believe sincerely and deeply in our hearts, as Catholics, that if a settlement reduced the ability of the church to educate its children or to do its charitable work, that would be unjust," said Patrick Hazel, president of Parishioners for Churches and Schools. "The parishioners who provided donations had no knowledge of the abuse, didn't condone it, didn't authorize it. They are innocent." The group wants to join a trial set for this fall in bankruptcy court that will determine whether parish properties can be seized or liquidated through the diocese in any settlement. The question of asset ownership has been hotly contested in San Diego since the diocese filed for Chapter 11 bankruptcy protection Feb. 27. The diocese initially said it had about $95 million in assets but now estimates that its assets may be worth close to $150 million. An independent audit of the diocese's accounts is being prepared under court order. Attorneys representing more than 140 plaintiffs, who are seeking a settlement of about $200 million, have sued the diocese in bankruptcy court for allegedly shielding land and other holdings worth millions through transfers to parishes and schools. Church officials deny they have hidden or illegally transferred resources. Irwin Zalkin, an attorney representing 54 alleged abuse victims, said his clients did not want to force churches and schools to close but he said the diocese has claimed a broad range of assets belong to its parishes. "It includes vacant lots, it includes condos, it includes gas stations, the revenues of which flow directly to the diocese," he said. An attorney for the diocese, Micheal Webb, welcomed the intervention of parishioners in the bankruptcy proceedings. "They're a separate organization, but we're glad to see them here," Webb said. If the motion for intervention by the parishioners' group is granted, it would be the first such legal claim by parishioners in a bankruptcy proceeding for a U.S. diocese, according to Thomas Califano, a lawyer for the parishioners' group. A hearing has been set for Sept. 6 before Bankruptcy Judge Louise DeCarl Adler. The parishioners' group also asked to be recognized by the federal trustee overseeing the case, Califano said. A call to U.S. trustee Steven Katzman was not immediately returned. Earlier this month, the Archdiocese of Los Angeles agreed to pay $660 million to settle abuse claims in the largest payout yet. Cardinal Roger Mahony has said the settlement will not have an impact on local ministries and that no parish properties or schools will be sold to cover the $250 million the archdiocese will pay outright. The San Diego diocese is the largest of five Catholic dioceses around the country to seek bankruptcy protection. The dioceses in Spokane, Portland, and Tucson, Ariz., have already emerged from Chapter 11 bankruptcy protection. The Davenport, Iowa, diocese, which faces claims from more than 150 people, is still in proceedings.
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