Bankruptcy Judge Protects Interests of Future Clergy Abuse Claimants

By Elizabeth Hardin-Burrola
Gallup Independent
April 10, 2015

http://gallupindependent.com/

U.S. Bankruptcy Judge David T. Thuma issued an order in the Diocese of Gallup’s bankruptcy case related to possible clergy sex abuse victims who may come forward in the future with claims against the diocese.

Thuma signed an order Friday appointing a legal representative to represent the interests of such future claimants, including individuals who might currently be minors. In his order, Thuma approved the employment of Michael P. Murphy, the managing director of AlixPartners, LLP, as the representative. AlixPartners, an international business advisory firm, was also approved to assist Murphy with his duties.

Unknown tort claimants

Referred to as the “unknown claims representative,” Murphy and AlixPartners will be paid a flat fee of $50,000, plus expenses to represent the interests of clergy sex abuse victims who might possibly come forward in the future. Those individuals are referred to as “unknown tort claimants” in court documents.

According to Murphy, he is currently serving as the future claims representative in the Diocese of Stockton’s bankruptcy case. In addition, he previously was appointed to that same position in church bankruptcy cases in Fairbanks, Alaska, and Davenport, Iowa.

On Feb. 11, bankruptcy attorneys for the Gallup Diocese, referred to as “the debtors” in the case, filed the motion requesting Murphy’s employment be approved by the court. The Unsecured Creditors Committee, which represents the interests of clergy sex abuse victims who have come forward and filed abuse claims with the court, supported the motion.

“Although the debtors are not currently aware of any such adults, the Arizona and New Mexico statutes of limitations for such claims may be tolled by certain circumstances,” diocesan attorney Elizabeth S. Fella stated in the motion. “Additionally, while the debtors are not yet aware of any tort claimants who may be younger than the age of legal majority, the interest of such minor tort claimants should also be represented, because they may be presently unable to come forward as a result of their minority.”

Funds for such claimants

The Gallup Diocese admitted in the motion that any plan of reorganization must provide for unknown tort claimants “that are currently unable to assert or are excused from asserting their Tort Claims because they are currently unable to advocate for themselves.” The motion said the Diocese of Gallup will preserve a portion of the funds under its reorganization plan to compensate such individuals.

In the motion, Fella set clear limitations to the pool of possible future claimants. “The class of Unknown Tort Claimants should include only those individuals who experienced sexual abuse as minors,” she stated.

The Diocese of Gallup continues to have a small number of active priests who have been accused of the sexual harassment and/or assault of adult victims. Since his arrival in Gallup in 2009, Bishop James S. Wall has not removed the priestly faculties of any of these alleged offenders.