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	Judge Throws out Settlement with Spokane Diocese Ruling Seeks Payment for Everyone Sexually Abused by Priests By John K. Wiley The Associated Press, carried in Seattle Post-Intelligencer May 19, 2006 http://seattlepi.nwsource.com/local/270839_spokane19.html SPOKANE -- A federal judge Thursday rejected a $45.7 million settlement negotiated with victims of sexual abuse in the bankruptcy of the Roman Catholic Diocese of Spokane. U.S. Bankruptcy Judge Patricia Williams threw out the settlement during a telephone conference hearing. The judge strongly urged the dozens of lawyers representing the diocese, victims, parishes and other parties to enter into mediation. Shaun Cross, a Spokane lawyer representing the diocese, said portions of the settlement, including a schedule of payment for victims, would be kept in a final bankruptcy plan. "I think the elements of the settlement we proposed with the 75 victims still have merit. The judge clearly found concerns with some elements," he said. The settlement, announced earlier this year, covered just 75 people who had filed lawsuits contending they were abused by priests. But about 185 individual claims have been filed against the diocese, although Williams has said some claims are duplicates and others are invalid. Spokane Bishop William Skylstad, president of U.S. Catholic bishops, was among clergy accused of sexual abuse in the bankruptcy claims. He has vehemently denied having sexual relations with a woman in the 1960s. Mike Ross, a member of the Spokane chapter of the Survivors Network of Those Abused by Priests, would have been covered by the diocese's settlement offer, but said the judge's ruling will ensure everyone gets compensated. "I think it's positive. All victims need to be compensated for their pain and suffering," he said. "What's fair needs to be equitably distributed in some sort of justice system that works for all." However, David Clohessy, national director of SNAP, said by e-mail from St. Louis that the judge's rejection of the diocese's offer will hurt victims who thought they would be compensated. "Our hearts ache for the dozens of deeply wounded and still hurting victims who thought a deal with the bishop was a deal," Clohessy wrote. "Equality is a valuable goal, but so too is healing and closure." Gayle Bush, a Seattle lawyer who co-wrote an alternative victim payment plan, said the diocese's proposed settlement did not take into account victims who did not sue or those who come forward in the future. "The ruling today was a very clear statement from the court that the confirmation of a plan in bankruptcy requires fair and equal treatment for all members of the same class," he said. "Her conclusion was the proposed settlement agreement did not meet the bankruptcy code standards for fair and equal treatment." Earlier this week, lawyers representing people not covered by the settlement filed an alternative plan that would assess individual parishes nearly two-thirds of the market value of their churches and schools in exchange for avoiding possible foreclosures. The diocese filed for bankruptcy protection in 2004, citing claims by abuse victims of about $81.3 million against assets of about $11 million. The diocese serves about 90,000 Catholics in 82 parishes in 13 Eastern Washington counties. The diocese's $45.7 million settlement offer had been opposed by the individual parishes, which said it appeared to rely on parishes to act as unlimited guarantors for future payments. Bob Hailey, a lay co-chairman of the Association of Parishes, a group of pastors and church members concerned the bankruptcy would leave churches, schools and cemeteries in jeopardy, said Williams' ruling could bring all parties to the table. "The true significance of the ruling is the diocese is no longer bound by the terms of an unworkable settlement agreement," Hailey said. "The Association of Parishes had asked that the judge order the parties to participate in mediation. The judge did that, and we think that is a positive development."
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