March 30, 2006

Cash-strapped Spokane Diocese has stopped paying its lawyers

The Oregonian

Thursday, March 30, 2006
SPOKANE -- The Roman Catholic Diocese of Spokane is so strapped for cash that it has stopped paying its lawyers, even as its complicated bankruptcy case enters a critical stage.

The diocese sought bankruptcy protection because of claims filed by people who contend they were sexually abused by priests.

The diocese for the past 16 months has paid both its own legal bills and the bills of lawyers for victims, and is running out of money even as the two sides try to settle.

"I'm very concerned, obviously, about the fact that frankly every month this debtor goes further and further in the hole in terms of cash," U.S. Bankruptcy Judge Patricia Williams said during a hearing this week.

"That's a fact of life that is getting worse every single month and I ask myself periodically, you know, how many churches are we going to have to sell just because we can't get to plan confirmation?" Williams said.

Williams wondered whether churches or other diocese assets may have to be sold just to pay the mounting costs of the case.

Posted by kshaw at March 30, 2006 08:33 AM