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	Ruling Expected on Abuse Suits' Release Progress Reported in Settlement Talks By Mark Sauer and Sandi Dolbee Union-Tribune August 24, 2007 http://www.signonsandiego.com/news/metro/20070824-9999-1m24diocese.html A federal bankruptcy judge will rule by Monday on whether dozens of child sexual-abuse lawsuits against the Roman Catholic Diocese of San Diego may go back to state court for trials. Judge Louise DeCarl Adler had tentatively sided with the victims' lawyers to release some of the lawsuits, but she delayed finalizing that decision yesterday after hearing that progress has been made in recent settlement talks. "We're working hard," attorney Irwin Zalkin, who represents many of the victims, confirmed in an interview. A church attorney said there has been serious progress in the past two weeks. In her tentative written ruling in favor of releasing 42 of 127 lawsuits to state court for trial, Adler issued a stern rebuke to the diocese. She said it appeared the diocese's attorneys were "forum shopping" when they filed for Chapter 11 bankruptcy protection in February and described the settlement offer as "substantially less" than what other California dioceses have paid. More than 900 cases involving allegations of sexual abuse of children by priests and church workers – in incidents dating back decades – have been settled for an average of between $1.1 million and $1.3 million per case in California. The diocese has offered an average of about $600,000. The bankruptcy filing placed an indefinite hold on San Diego's abuse lawsuits, four of which had been scheduled for trials. The lawsuits had been stalled for more than three years of legal wrangling and failed mediation talks. Diocese attorneys asked the judge not to release the cases, saying jury trials would unduly delay its bankruptcy reorganization plan – and resolution of the claims. Online: For a look at the judge's tentative ruling But plaintiffs' attorneys argue otherwise. "We have flesh and blood human beings who are looking for relief," said Jim Stang, who represents the victims committee in the bankruptcy. The debate over releasing the cases took up much of yesterday morning. Then, in the afternoon, court-appointed financial expert R. Todd Neilson testified for 3½ hours about a report that could lead to the bankruptcy case being dismissed. His report, which was filed July 30, found that the diocese had made conflicting statements about assets and that millions of dollars in surplus parish funds had been withheld from the diocese's central banking system. Based on these findings, Adler has ordered a hearing for Sept. 6 on whether to dismiss the diocese's bankruptcy petition. One of the most hotly debated financial questions is who owns the 98 parishes. Church attorneys insist that they are separate from the diocese – but Neilson reiterated yesterday that he believes they are not independent entities. He cited several factors for his opinion – including that parishes cannot create themselves, and the bishop has the authority to "hire or fire" or reassign a priest to another church. "I think there is more of an argument for the fact that they are not independent than they are independent," Neilson said. Under questioning by lead diocese bankruptcy attorney Susan Boswell, Neilson noted that no money had been stolen from parish funds. "It's not that they boogied down to Mexico with (the money) in a trunk," Neilson said. Rather, the funds in question – totaling at least $19 million – were moved into other accounts. Neilson is scheduled to return for questioning at the Sept. 6 hearing. Mark Sauer: (619) 293-2227; mark.sauer@uniontrib.com Sandi Dolbee: (619) 293-2082; sandi.dolbee@uniontrib.com
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