Stockton Diocese Steps Closer to Bankruptcy

By Sue Nowicki
Modesto Bee
September 12, 2013

http://www.modbee.com/2013/09/11/2916040/stockton-diocese-steps-closer.html

Roman Catholic Bishop Stephen Blaire sent out a letter to parishioners last weekend, saying the Diocese of Stockton has not made a final decision on filing for bankruptcy protection, but “it appears likely.”

The move would shelter the diocese from paying large awards in current and future lawsuits claiming sexual abuse by priests, specifically against notorious pedophile ex-priest Oliver O’Grady and the Rev. Michael Kelly. To date, more than two dozen of O’Grady’s victims have collected nearly $25million in damages from the diocese; the largest settlement ever paid by the diocese to an individual was $3.75million in a lawsuit against Kelly last year.

In his letter, Blaire promised the 35 individual parishes in the diocese – which numbers 250,000 parishioners and includes St. Stanislaus, Our Lady of Fatima and Holy Family in Modesto, Sacred Heart in Turlock and St. Jude in Ceres, among others – would not be impacted by a bankruptcy filing because they are all separate corporations. So, too, are other diocesan programs: The Catholic high schools in Modesto and Stockton, Catholic cemeteries, Catholic Charities, a retreat center, SEEDS (which provides Catholic school tuition assistance) and the recent capital campaign drive.

The diocese’s operational budget, too, is a corporation called “The Roman Catholic Bishop of Stockton,” according to diocesan officials. That’s the one considering filing for bankruptcy. Its budget is $5.1million for the 2013-14 year.

Blaire’s letter said he is committed to finding a “a way to meet our obligations to the victims of sexual abuse who have not yet had their day in court” but did not specify how that would happen. The bishop concluded by promising to inform the parishioners “when a final decision is made.”

On Monday, national leaders of SNAP – the Survivors Network of those Abused by Priests – sent out a press release asking Blaire to use caution “before taking a radical, risky step that may prolong the pain so many Catholics and victims still feel, and delay the healing so many Catholics and victims deeply deserve.” They want Blaire to allow “independent auditors to examine the diocese’s checking accounts, savings accounts, stocks, bonds, property and insurance policies” so “there can be an objective determination about whether church officials have sufficient resources to help victims.”

On Wednesday, Blaire was meeting with other bishops in a nationwide conference and was unavailable for comment.

Contact: snowicki@modbee