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	Delaware Catholic Church to Share Cash with Victims (update1) By Steven Church Bloomberg Businessweek June 29, 2010 http://www.businessweek.com/news/2010-06-29/delaware-catholic-church-to-share-cash-with-victims-update1-.html June 29 (Bloomberg) -- Delaware’s Roman Catholic parishes must share as much as $120 million with people sexually abused by priests, according to a ruling by the judge overseeing the bankruptcy of the Catholic Diocese of Wilmington. U.S. Bankruptcy Judge Christopher Sontchi yesterday ruled that a pool of $120 million administered by diocese officials should be considered part of the bankruptcy case. Sontchi said the parishes were also entitled to file claims against the diocese because they had added money to the investment account. “This is a great victory for all the survivors of sexual abuse in the diocese,” said Thomas Neuberger, an attorney for sex-abuse victims who have sued the diocese and some of its parishes. The diocese filed bankruptcy in October with plans to settle lawsuits by current and former parishioners who say they were sexually molested by priests. Since then, lawyers for the diocese and those for more than 140 abuse victims have fought in court over everything from the cash pool to which sex-abuse lawsuits should be allowed to go to trial. “We’re very disappointed in this ruling and we’re exploring what our next steps will be,” Bob Krebs, a spokesman for the diocese, said in an interview today. He declined to answer questions. Sontchi said the creditors in the bankruptcy, who include employees with potential pension losses, abuse victims and some parishes, “almost certainly” will not get back everything they claim to be owed. ‘Harsh Result’ “This may seem like a harsh result to the non-debtor defendants,” Sontchi wrote, referring to the parishes. “But to ignore precedent by ruling in their favor would have a negative impact on the other creditors -- the vast majority of which are involuntary creditors that have asserted tort claims against the debtors relating to sexual abuse.” Earlier this year, Sontchi ordered the diocese into mediation with the abuse victims. The abuse victims have asked Sontchi to determine whether the parishes themselves should be considered part of the bankruptcy case. That would mean individual church properties, such as schools, land or bank accounts, could be used to pay creditors. Currently the parishes aren’t in bankruptcy because they are organized as separate non-profit corporations. Neuberger said he isn’t trying to force the parishes to sell their churches. After the bankruptcy filing, most of the lawsuits against the diocese, led by Bishop W. Francis Malooly, were put on hold. 130 Lawsuits More than 130 lawsuits have been filed against the diocese or Catholic religious orders in Delaware. Those lawsuits involve about 25 priests accused of sexually assaulting more than 140 children during the past five decades. The Wilmington diocese’s bankruptcy followed cases in Fairbanks, Alaska; Portland, Oregon; Spokane, Washington; Davenport, Iowa; and Tucson, Arizona. A Jesuit religious order in Oregon also filed for bankruptcy court protection. In 2007, San Diego’s Catholic diocese agreed to pay $198 million to settle 144 abuse claims. The Catholic diocese in Fairbanks offered victims and other creditors about $11 million as part of its bankruptcy, according to the diocese’s Web site. In the bankruptcy cases that ended, victims were paid, on average, from $300,000 to as much as $1.3 million each, according to James Stang, an attorney for creditors. Stang represents creditors and victims in Delaware and at least two other Catholic bankruptcies. The case is In re Catholic Diocese of Wilmington Inc., 09- 13560, U.S. Bankruptcy Court, District of Delaware, (Wilmington). --Editors: Peter Blumberg, Stephen Farr To contact the reporters on this story: Steven Church in Wilmington, Delaware at schurch3@bloomberg.net To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net
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