Bishop’s declaration telegraphs legal intent By Elizabeth Hardin-Burrola Gallup Independent correspondent religion@gallupindependent.com November 14, 2013 ALBUQUERQUE — The Diocese of Gallup filed its petition for Chapter 11 reorganization in Albuquerque’s U.S. Bankruptcy Court late Tuesday, after claiming mounting clergy sex abuse claims forced the decision. The diocese’s newly hired bankruptcy attorneys are set to appear before Judge David T. Thuma for an emergency hearing Friday morning to ask the court to approve a number of motions to keep the diocese operating. Included in the motions are requests to use existing bank accounts and cash management system, prohibit utility service providers from discontinuing services and the payment of wages to its employees. The diocese, incorporated in both New Mexico and Arizona, filed more than 400 pages of documents. Listed creditors include a couple of banks, a number of local and national utility companies and about 50 employees, including six priests out of the 38 priests reported to be working in the diocese. It is unclear why the remaining priests are not listed as employees. The main creditors are expected to be individuals with clergy sex abuse claims against the diocese. Currently, 13 men and women, represented by attorneys Robert E. Pastor, of Phoenix, and John C. Manly, of Irvine, Calif., have filed clergy sex abuse lawsuits against the diocese in Arizona’s Coconino County Superior Court. The diocese has said there are another eight pending claims not in litigation, and it expects more claims to be filed. Pastor and Manly are listed as attorneys for tort claimants, as is Houston attorney Richard T. Fass. Bishop’s declaration “I believe it is in everyone’s best interests to move the Reorganization Case expeditiously to conclusion,” Gallup Bishop James S. Wall stated in a declaration document he filed supporting the petition. “Otherwise, estate assets will be consumed with the costs of the Chapter 11 as opposed to being primarily used to compensate those who have been harmed.” Wall admitted the diocese “will be challenged just to pay the costs of administration of the Reorganization Case, without regard to funding a plan to compensate those who have been abused.” Certainly the diocese’s bankruptcy attorneys — who charge hundreds of dollars per hour — might walk away from the Chapter 11 with more money than any claimant who was sexually abused as a child by a Gallup priest. Those attorneys are Susan Bowell, Elizabeth Fella and Lori Winkelman, of Quarles & Brady in Tucson, Ariz., and Thomas D. Walker, of Walker & Associates in Albuquerque. Boswell, the top bankruptcy attorney, has previously represented other Roman Catholic dioceses. In addition, the diocese hired Keegan, Linscott & Kenon, a Tucson tax, accounting and business consulting firm, after its chief financial officer, Deacon James Hoy, resigned just two months before the Chapter 11 announcement was made. Bankruptcy strategy Where the diocese will be getting the money to pay these attorneys, accountants and creditors was not explained by the bishop in his declaration document. However, the bishop appears to hint at the diocese’s bankruptcy strategy through the following points: -Wall claims the Gallup Diocese is the poorest Roman Catholic diocese in the country. -Wall emphasizes the large Native American population in the diocese’s geographic area even though the majority of Catholics in the diocese are Hispanic and Anglo, and the majority of Native Americans are not Catholic. -Wall offers considerable explanation as to how the Gallup Diocese and its parishes “are separate ecclesiastical entities in their own right” and that their debts and assets are separate from each other. The only exception to that is St. Anthony’s Parish in McNary, Ariz., which “simply does not have the resources to support itself,” Wall states. -Wall states, “The diocesan bishop ... does not have the right to possess, sell, encumber or otherwise dispose of parish property.” -Wall also states that although in many instances the Diocese of Gallup is listed on the deeds to parish property as the title holder, this “does not reflect the true ownership of the property.” -Wall admits that shortly before the diocese filed the Chapter 11 petition, he and a representative of every parish “executed and caused to be recorded in the public records of the county in which the real property was located a notice of the trust relationship” between the diocese and the parish. Wall said this was done in “order to avoid any confusion about the ownership” of parish property. -Wall continues to claim most of the clergy abuse allegations date back to the 1950s, 1960s and 1970s even though a number of publicly accused abusers remained in ministry in the 1980s and 1990s and last decade. In contrast, although the bishop has stated the need for Chapter 11 reorganization was caused by rising numbers of clergy sex abuse claims, Wall, in his submitted document, does not provide any information about the names of the clergy sex abusers whose crimes against children led the diocese into bankruptcy court, nor does he offer information about the total number of alleged victims who have come forward or the total number of abuse allegations.

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