Diocese: Bankruptcy Unavoidable

By Kevin Parrish
The Record
December 3, 2013

http://www.recordnet.com/apps/pbcs.dll/article?AID=/20131203/A_NEWS/312030313

Bishop Stephen Blaire talks about bankruptcy in the diocese office earlier this year.

STOCKTON - Out of options, the Roman Catholic Diocese of Stockton is expected to file for bankruptcy early next year.

Bishop Stephen Blaire has issued a letter notifying the six-county diocese's 250,000 members that a final decision is likely "after the first of the year."

Blaire said that after months of research, "no viable option has emerged other than reorganizing financially under the protection of bankruptcy court."

The letter was distributed Sunday to the diocese's 35 parishes and 14 missions.

Blaire also encouraged various auxiliary Catholic organizations to obtain legal advice to be ready for possible asset claims that could be made by creditors. He said they "need to be prepared in case they are challenged, as has happened in other dioceses."

Chapter 11 protection is needed because of the financial drain from continuing settlements stemming from sex-abuse lawsuits. Through 2010, the Stockton diocese had settled 22 such cases at a cost of $18.7 million.

Blaire said in September the diocese no longer had the resources to meet the obligations of current or pending lawsuits.

Talk of bankruptcy first emerged in June.

In an earlier letter and again over the weekend, Blaire emphasized the importance of meeting the obligations owed to "the victims of sexual abuse who have not yet had their day in court."

Sister Terry Davis is director of communications for the diocese. She said Monday that the latest letter was part of an ongoing commitment to transparency.

"It tells people we have continued to explore financial options - but we have found no viable option," she said. "And, minus a miracle or a deus ex machina, we will have no other option."

Davis explained that deus ex machina is a Latin term that, in a literary sense, means a sudden, unexpected resolution to a seemingly unsolvable problem. "Sort of like a Hail Mary," Davis said. She said such a resolution was unlikely.

The diocese's parishes and most of its ministry arms have been set up as individual corporations under the umbrella of the church. That separation is important.

"There needs to be a lot of clarity on that," Davis said. "There is effort to make that clear for the purposes of bankruptcy."

Blaire's letter also expressed gratitude to those still faithful to the church and its mission.



Contact: kparrish@recordnet.com