Diocese Bankruptcy Costs Top $2.7 Million

By Elizabeth Hardin-Burrola
Gallup Independent
August 11, 2015

http://gallupindependent.com/

The Diocese of Gallup racked up nearly $500,000 more in legal fees and expenses over a recent three-month period in its bankruptcy case.

The diocese’s legal costs now top more than $2.7 million, according to quarterly billing statements submitted to U.S. Bankruptcy Court by more than a half-dozen law firms, accountants, insurance researchers and real estate appraisers.

The total legal costs, as of June 30, are now $2,704,865.31. At the end of March, the legal costs were $2,258,084.14.

The Gallup Diocese owes more than $1.5 million to Quarles & Brady LLP, its lead bankruptcy law firm. It owes more than $600,000 to the law firm that provides legal counsel to the Official Committee of Unsecured Creditors, which represents the interests of clergy sex abuse claimants. In addition, the diocese owes more than $360,000 to its accounting firm.

The professionals listed below have submitted the following quarterly and total billing figures. Most of these bankruptcy fees and expenses will not be paid until the Gallup Diocese has an approved plan of reorganization.

Quarles & Brady LLP: The Tucson law firm submitted the year’s second quarterly statement for legal fees and expenses of $252,944.33. The firm’s total post-petition bill is now $1,597,610.38.

Keegan, Linscott & Kenon, P.C: The Tucson accounting firm submitted a second quarterly statement for fees and expenses of $52,475.16. The firm’s total post-petition bill is now at $367,291.60. This firm continues to run the Diocese of Gallup’s finance office because the diocese hasn’t been able to hire a new chief financial officer since the previous one resigned just months before the Chapter 11 filing.

Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A: The diocese’s special counsel law firm from Albuquerque billed $1,149.06 for the second quarter. The firm’s total post-petition bill is now at $11,899.82.

Insurance Archaeology Group: This insurance research company did not submit a second quarterly billing statement. The company has previously billed the Gallup Diocese $47,929 and has been paid that amount.

Estate Valuation Consultants Inc.: This real estate appraisal company submitted a second quarterly statement for $9,900 in fees. The company’s total bill of $22,100 has been paid by the diocese.

Michael P. Murphy: Murphy is the “unknown claims representative” hired to represent any new clergy sex abuse victims who might come forward in the future. Murphy has not submitted any fees or expenses yet, but his flat fee of $50,000 will be due and payable upon the effective date of any plan of reorganization.

Walker & Associates P.C.: The diocese’s Albuquerque bankruptcy law firm has not submitted a billing statement in 2015. To date, the firm has billed $18,062.40 in post-petition fees and expenses.

Pachulski Stang Ziehl & Jones LLP: This law firm is the legal counsel for the Official Committee of Unsecured Creditors, representing sexual abuse claimants. The firm submitted a second quarterly statement for fees and expenses of $180,312.62. The firm’s total post-petition bill is now $639,972.11.