Diocese Seeks Bankruptcy

By Olivier Uyttebrouck
Abq Journal
September 4, 2013

http://www.abqjournal.com/257330/news/diocese-seeks-bankruptcy.html

The Diocese of Gallup intends to petition for Chapter 11 bankruptcy reorganization in response to a growing number of lawsuits filed by alleged victims of clerical sex abuse.

Leaders of the diocese described bankruptcy as a way of ensuring justice and fairness for victims of sexual abuse by providing for an orderly distribution of the diocese’s limited resources.

Diocese of Gallup Bishop James Wall said in a letter read to parishioners over the Labor Day weekend that bankruptcy is intended to treat abuse victims “in a just, equitable and more merciful manner” while allowing the diocese to continue its pastoral mission.

“Under Chapter 11, the diocese will have the opportunity to present a plan of reorganization that provides for a fair and equitable way to compensate all those who suffered sexual abuse as children” by priests, the letter said.

Representatives for victims of clergy sex abuse called the move a legal tactic that would allow Wall and other diocesan officials to sidestep testimony that could lead to additional claims.

“I think the primary, or immediate, objective of the diocese is to prevent Bishop Wall from having to be deposed and put under oath,” said Robert Pastor, a Phoenix attorney who has filed lawsuits on behalf of 13 alleged victims.

“The bankruptcy proceeding will stay, or put on hold, any other cases that are pending” until a bankruptcy judge decides which cases can proceed, Pastor said.

The Rev. Timothy Farrell, a spokesman for the Diocese of Gallup, called Pastor’s allegations “absolutely not true.”

Farrell said reorganization under bankruptcy is an essential response to a flood of lawsuits against the diocese that he said now numbers more than 20.

“We’re the poorest diocese,” Farrell said Tuesday. “We don’t have money. There’s no way we can keep trying to settle these cases. It’s just killing us.”

The 55,000-square-mile Roman Catholic Diocese of Gallup encompasses all or parts of eight northwestern New Mexico counties and two Arizona counties, including seven Native American reservations.

Farrell said bankruptcy will allow the diocese to pool its money for equitable distribution to all victims of clerical abuse.

“If one person gets all the money, what about the victims who file second and third? They get nothing,” he said.

The first of the sex abuse lawsuits filed by Pastor is scheduled for trial in 2014 in Arizona’s Coconino County Superior Court in Flagstaff.

That lawsuit, filed by an unnamed Arizona man, alleges sexual abuse by the Rev. Clement Hageman while he served as a parish priest in Holbrook, Ariz., in the 1950s. Hageman died in 1975.

Wall and another priest in the diocese are scheduled to be deposed Sept. 18, Pastor said. That deposition is likely to be postponed if the diocese petitions for bankruptcy, he said.

The Hageman case was the first of the 13 lawsuits Pastor filed against the diocese from 2010 through June 2013, he said.

Pastor said his cases are the only lawsuits filed against the diocese. He disputed Farrell’s estimate that the diocese faces more than 20 lawsuits.

The Gallup Diocese will become the ninth U.S. Roman Catholic diocese or archdiocese to seek bankruptcy protection since the clergy abuse scandal erupted anew in 2002. Two Catholic religious orders have also done so.

Barbara Dorris, a spokeswoman for the Survivors Network of those Abused by Priests, or SNAP, criticized the Gallup Diocese’s decision to petition for bankruptcy.

“This isn’t about protecting church money,” Dorris said. “It’s about protecting the power and reputations of powerful church officials who desperately want to keep their complicity in child sex cases under wraps.”