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	Settlement Would Put Spokane Parishes on Hook Sex-Abuse Cases - Lawyers for a Group of Victims File a Proposal in U.S. Bankruptcy Court The Oregonian May 17, 2006 http://www.oregonlive.com/news/oregonian/index.ssf? /base/news/114783271278600.xml&coll=7 SPOKANE -- Lawyers representing people not covered by a proposed settlement in the Roman Catholic Diocese of Spokane bankruptcy have filed an alternative method of paying victims of clergy sexual abuse. The proposal filed in U.S. Bankruptcy Court would assess individual parishes nearly two-thirds of the market value of their churches and schools in exchange for avoiding possible foreclosures. The alternative payment plan was filed by creditors' committees representing sex-abuse victims left out of the diocese's settlement offer, in which 75 claimants would be paid a total of $45.7 million. U.S. Bankruptcy Judge Patricia Williams could decide as early as this week whether the diocese settlement offer is legally acceptable. Competing plans are not unusual in large bankruptcies, but only one reorganization plan can be accepted. The diocese filed for bankruptcy protection in 2004, citing claims by abuse victims of about $81.3 million against assets of about $11 million. Plan draws interest About 185 individual claims have been filed against the diocese, although Williams said some claims are duplicates and others are invalid. The proposal filed by lawyers representing those not covered by the diocese settlement offer would require most parishes to pay the equivalent of 65 percent of their fair market appraised value to settle sex-abuse claims. Small parishes and those in rural areas would be asked to raise $100,000, or 65 percent of their appraised value, whichever is less. The new proposal has drawn interest from the Association of Parishes, a group of priests and laity leaders who worry that Bishop William Skylstad's bankruptcy strategy will place churches, schools and other assets in jeopardy. The diocese's $45.7 million settlement offer appears to rely on parishes to act as unlimited guarantors for future payments, the association argues. Attorney Ford Elsaesser, representing the parish association, said the settlement offer could lead to a "fire sale" of Catholic churches if the diocese cannot come up with enough money to pay a $26.6 million balloon payment the diocese offer calls for in October 2007. Attorneys Joe Shickich and Gayle Bush wrote the alternative payment plan and said it offers equal treatment to all victims, whether they hired lawyers and filed lawsuits years ago or waited until this year to make claims. James Stang, an attorney who helped write the original settlement offer on behalf of 75 victims, said an earlier ruling by Williams took the parishes out of settlement talks. Williams ruled that parish property is held in trust for the benefit of the bishop, meaning the diocese, not church members, owns the property. Newspaper seeks records Meanwhile, Williams asked lawyers to come up with a way to allow public inspection of sensitive records while protecting the identities of abuse victims. The Spokesman-Review sought to open sealed records so it and the public can track the cases of people who allege they were sexually abused by priests and other clergy. Williams said the actual bankruptcy "proofs of claims" already have been sealed in the Chapter 11 case, but information such as objections and responses to the claims -- without victims' names -- should be public. The diocese argued that releasing the records could make public the names of priests falsely accused of sexual abuse. Skylstad, president of the U.S. Conference of Catholic Bishops, is among those accused of sexual abuse. He has vehemently denied having a sexual relationship with a woman in the 1960s. The newspaper -- which argued that the names of defendants in criminal and civil cases are public -- would need to file a separate request to gain access to the actual claims, Williams said. The diocese will be asked to delete the names of victims before those records are released. The diocese is among three in the United States to seek bankruptcy protection to deal with sex-abuse claims and lawsuits. The others are Portland, Ore., and Tucson, Ariz. The Spokane Diocese serves about 90,000 Catholics in 82 parishes in 13 eastern Washington counties.
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