Diocese’s Bankruptcy Costs Now Top $1.8 Million

By Elizabeth Hardin-Burrola
Gallup Independent
February 12, 2015

http://gallupindependent.com/

The Diocese of Gallup, which had to borrow money in order to file for Chapter 11 reorganization, currently owes its lead bankruptcy law firm more than $1 million in legal fees and expenses.

The diocese’s total bankruptcy bill is now in excess of $1.8 million for professional services and expenses provided by various attorneys, accountants and insurance researchers. The updated total represents fees and expenses through Dec. 31, 2014.

Documents filed last week in U.S. Bankruptcy Court show the Gallup Diocese has been billed $1,854,316 by six different professional firms.

The diocese’s lead bankruptcy firm, Quarles & Brady LLP of Tucson, is owed the bulk of the money, with its current billing now at $1,129,598. The law firm’s most recent notice of fees and expenses, filed Jan.30, corrected a previous addition error included in a billing notice dated Nov. 14, 2014.

Pachulski Stang Ziehl & Jones LLP is legal counsel for the Official Committee of Unsecured Creditors, which represents the interests of clergy abuse survivors who have filed claims against the diocese in U.S. Bankruptcy Court. The Diocese of Gallup is responsible for the firm’s legal fees and expenses, which are now up to $373,374.

The diocese’s Tucson accounting firm, Keegan, LinScott & Kenon, P.C., is now owed $277,093.

Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A., a New Mexico law firm that frequently represented the diocese prior to the Chapter 11 filing, is owed $9,754.

Walker & Associates, P.C., the diocese’s Albuquerque bankruptcy law firm, has not submitted an updated bill beyond its first bill for $18,062.

Insurance Archaeology Group, an insurance research company, did not incur any fees and expenses in the most recent quarterly billing period.

Other than Insurance Archaeology Group, which has been paid $46,433, none of the other firms are slated to receive payment for their professional services until the Diocese of Gallup’s plan of reorganization is approved by U.S. Bankruptcy Court.

Prior to filing its Chapter 11 petition, the Diocese of Gallup borrowed $200,000 from the Diocese of Phoenix and $29,000 from the Archdiocese of Santa Fe. In December 2013, in testimony before the Assistant U.S. Trustee, Gallup Bishop James S. Wall said he took out the two loans in order to file for Chapter 11 reorganization.