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	Davenport Diocese Files for Bankruptcy Church Leaders Fear There Will Be No End to Claims over Priest Abuse By Shirley Ragsdale and Erin Jordan Des Moines Register [Iowa] October 11, 2006 http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20061011/NEWS/610110370/1001/SPORTS020502 The Davenport Diocese of the Roman Catholic Church filed for bankruptcy Tuesday afternoon. The diocese becomes the fourth diocese in the United States to go to bankruptcy court to protect its church assets from lawsuits and claims by people alleging they were sexually abused as children by priests. The decision by church officials in Davenport to put the financial fate of the southeast Iowa diocese in the hands of a federal bankruptcy judge comes a month after the Davenport Diocese was ordered to pay $1.5 million to an abuse victim. The bankruptcy filing was less than two weeks before the diocese was scheduled to go to trial over allegations against the most prominent alleged sex-abuser - the Rev. Lawrence Soens, now retired, a Davenport Diocese priest who went on to become the bishop of the Sioux City Diocese. Rand Wonio, the diocese's attorney, told The Des Moines Register: "The diocese believes that the way recent state court rulings have gone, there will be no end to claims. Consequently, the diocese had decided to turn over its assets for distribution to all claimants by federal bankruptcy court. This is a much more fair and equitable way to compensate all victims." Bishop William E. Franklin, in a written statement, said that in spite of all the good work by the people of the diocese to carry on the Gospel of Jesus Christ, the diocese had come to a crossroads due to the action and inaction of a few people that caused what he called "a great tragedy" to the victims of abuse. "Because the settlement demands are greater than the available assets of the diocese, we cannot continue on our present path," said Franklin. "To do so would mean that victims who have already made claims through their attorney would consume the remaining assets of the diocese, leaving no money for other victims who have not yet made the decision to come forward." The announcement was greeted with sadness, and ridicule, by abuse victims' attorneys and advocates. "Deny it. Hide it. Fight it. Bankrupt it. That's the bishops' policy regarding allegations of child abuse," said Craig Levien, the lawyer for Michael Gould and 14 other men who are suing the diocese, alleging they were sexually abused years ago by Soens when he was principal at Regina Catholic High School in Iowa City. A district judge on Tuesday dismissed the school from the lawsuit. David Clohessy of St. Louis, national director for the Survivors Network of those Abused by Priests, said: "Bankruptcy is not a particularly Christian response. Other bishops in Franklin's position have taken insurers to court, sold property or borrowed money to put healing of victims and the church first over protection of the hierarchy." The growing scandal over sexual abuse by Catholic priests has hit the Davenport Diocese hard financially, with the diocese paying $10.5 million since 2004 to resolve dozens of claims. The $1.5 million verdict last month raised the anxiety level in the chancery in Davenport at a time when church leaders were sizing up the potential financial effect over the first of a possible series of trials involving the allegations against Soens, dating back to the 1960s when he headed the Catholic high school in Iowa City. Soens, who retired as bishop of the Sioux City Diocese in 1998, is the highest-ranking Catholic in Iowa to be embroiled in the sex-abuse allegations. Catholics in the Davenport Diocese said they were unsure how the decision to file for bankruptcy will affect their parishes. "It's kind of a nervous time," said Bill Jenkins, parish council president at St. Patrick's Catholic Church in Iowa City. When bankruptcy rumors first surfaced several years ago, parishes began taking steps to protect their assets, he said. The hope is that those measures will prevent churches from being sold or their cash and investments taken as part of a legal settlement or bankruptcy proceeding. "The diocese is not going to stop the parishes from functioning in their day-to-day lives," Jenkins said. Twenty-two counties and 84 parishes make up the diocese. There are about 105,000 members in those parishes. The Davenport Diocese is the fourth diocese to file for bankruptcy since the Catholic Church's sex-abuse scandal exploded into the spotlight several years ago. Dioceses in Portland, Ore., Spokane, Wash., and Tucson, Ariz., went to bankruptcy court in 2004. Bankruptcy is not a cheap, nor easy, way out of the scandal for any Catholic diocese, according to legal experts. Only Tucson has emerged from bankruptcy, and the remaining bishops caught up in bankruptcy regret the filings, according to Fred Naffziger, a professor of business law at Indiana University South Bend. "Filing bankruptcy puts the bishop between the devil and the deep blue sea," Naffziger said. "It's costly. The Spokane diocese has spent about $7 million in attorney fees. The Portland archdiocese has spent $14.6 million. That's not all their expenses, just the cost of the bankruptcy." The bankruptcy filing Tuesday will put the assets of the Davenport Diocese into play to satisfy all claims and judgments, said Samuel Gerdano, executive director of the American Bankruptcy Institute in Alexandria, Va. That may not be a bad thing, according to Joshua Casteel, a University of Iowa graduate student who attended mass Tuesday at St. Mary's Catholic Church in Iowa City. "A possible collapse could be what the church needs to get back to the tenets of the Gospel," Casteel said. "It would be a tragedy to lose the buildings, but if we have to lose them to save our souls, so be it." Jolene Trenkamp, who attends St. Joseph's of Sugar Creek Church in Clinton County, said the abuse scandal has shrunk church attendance and caused donations to fall off. "The bishop's annual appeal is coming, and I'm assuming people just won't pay it because they don't want it going to the lawsuit," she said. Tim Kosnoff of Seattle, Wash., a lawyer for victims having claims against the Spokane Diocese, said bankruptcy has been a disaster there. "It's a morally reprehensible place to deal with the issues of victims," Kosnoff said. "And for the diocese, filing bankruptcy is like a cockroach hotel - easy to get into and hard to get out." The consequences of the long, complicated and drawn out bankruptcy procedure is difficult for everyone. The bishops have not kept lay Catholics well informed about complicated bankruptcy procedures, and as a result, there has been backlash against the abuse victims, said Bill Crane of Sandy, Ore., regional director of the network of priest-abuse survivors. "Some lay Catholics are laying false guilt on the victims," Crane said. "They say things like, 'It's bad enough what happened to you guys, but it's a greater sin for you to take our church away.' " Reductions in the size of donations from parishioners is possible, according to Naffziger, the Indiana professor. "In Portland, the diocese wanted to renovate the cathedral, but Catholics were unwilling to give because they feared the money would go to the bankruptcy legal costs," Naffziger said. "The diocese set up a separate corporation dedicated to renovating the cathedral and from what I hear, fundraising is going pretty well because people are confident the money is going to a separate entity." Using bankruptcy to bring an end to the ongoing claims of abuse and to the potential financial drain on the diocesan treasury those claims represent seems to be a possible solution to some lay Catholics in Iowa. Tom Stellern, a member of the Saints Mary and Joseph Catholic Church in Fort Madison, said he doesn't like that people are able to file lawsuits about actions alleged to have occurred decades ago. Bankruptcy proceedings would likely put a deadline on future claims. "Some of these lawsuits are more about money than anything," he said. "If I had a problem, I wouldn't wait 25 years to speak up." Bishop Franklin asked Catholics for the continued prayers of healing for victims, survivors and their families, and for himself. "The Catholic abuse scandal has impacted everyone in some way; victims, laity, priests and religious," he said. "I pray that with the decision announced today, a new path toward healing can begin for everyone."
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