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	Crucial Hearing Postponed in Diocese Bankruptcy Case By Teri Figueroa North County Times September 5, 2007 http://www.nctimes.com/articles/2007/09/06/news/sandiego/5_02_179_5_07.txt SAN DIEGO -- A crucial hearing over the fate of a bankruptcy case filed by the Roman Catholic bishop of San Diego is on hold for a week, amid reports that settlement talks are heating up with dozens who want the diocese to pay for alleged sex abuse by priests. U.S. Bankruptcy Judge Louise DeCarl Adler was supposed to hear arguments today about why she should not dismiss the diocese's bankruptcy filing, but instead she rescheduled the hearing until Sept. 11. The diocese filed for Chapter 11 reorganization on Feb. 27, on the eve of jury selection for five civil trials to address claims brought by alleged sex abuse victims. The bankruptcy filing froze the civil court proceedings until late last month, when Adler gave the green light for 42 of the sex abuse trials to move forward. Attorneys attached to the case said Wednesday that mediation rules barred them from talking about the settlement. Barbara Dorris, spokeswoman for the nationwide Survivors Network for those Abused by Priests, urged all the attorneys, victims and church officials involved in settlement talks to honor the order of the mediator -- U.S. Magistrate Judge Leo Papas -- to keep mum about the talks, lest any media leaks poison the negotiations. "Progress toward a settlement is one thing," Dorris wrote in a statement released Wednesday. "An actual settlement is something else." Settlements in Southern California cases involving sex abuse at the hands of Catholic priests and other church officials have averaged more than $1 million per victim. Court documents tied to the San Diego diocese bankruptcy plan show the diocese was offering less than half that amount for each claimant. That negotiations could be heating up would come as no surprise. Two weeks ago, when attorneys for the plaintiffs urged Alder to release 42 of the civil cases -- roughly one-third of all the San Diego sex abuse claims -- for trial, they argued that doing so would pressure the diocese into more fruitful negotiations. The diocese bankruptcy case is on the ropes. In a six-page order issued in August, Alder ordered the church to tell her why she shouldn't drop the case after she found the church had undervalued real estate holdings and failed to disclose "material facts" to the court. Her comments came after reviewing the independent audit ordered to look at the diocese's books. In auditor R. Todd Neilson's ensuing 175-page report, turned in to the court on July 30, Neilson states that a handful of parishes had deliberately concealed or inappropriately handled about $500,000 in sometimes "purposeful attempts" to circumvent federal bankruptcy proceedings. The San Diego diocese, which covers San Diego and Imperial counties, has 98 churches, runs 50 schools and has nearly 1 million parishioners. -- Contact staff writer Teri Figueroa at (760) 631-6624 or tfigueroa@nctimes.com.
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