Fire sale deals seen at diocese auction By Elizabeth Hardin-Burrola Gallup Independent correspondent religion@gallupindependent.com Sept. 26, 2015 GALLUP – After selling nearly three dozen pieces of unwanted property in auctions in Phoenix and Albuquerque at fire sale prices, the Diocese of Gallup earned just about $160,660 from the endeavor. According to reports submitted to U.S. Bankruptcy Court by diocesan attorneys, the sales total for both auctions was $225,066. Tucson Realty & Trust Co. of Arizona and Accelerated Marketing Group of California, the businesses that were hired by the diocese to promote and conduct the auctions, walked away with about $65,500. The diocese paid the companies a flat fee of $45,000 and agreed to let them collect a buyer’s premium of 10 percent on every sale. Todd Good, the CEO and president of Accelerated Marketing Group, barred the public and the media from observing the Albuquerque auction Sept. 19. Good only allowed qualified bidders into the event, although the auctions had not been described as closed in court documents. It is unknown if any member of the public was barred from observing the Phoenix auction Sept. 12. Diocese fundraiser Attorneys with Quarles & Brady LLP, the diocese’s lead bankruptcy firm, had promoted the auctions as a way to help raise funds to pay for the Gallup Diocese’s plan of reorganization. However, the property sales will only make a slight dent in the amount of money the diocese now owes a multitude of attorneys, accountants and other professionals. The diocese’s bankruptcy costs top more than $2.7 million, according to quarterly billing statements submitted to U.S. Bankruptcy Court as of June 30. The diocese owes Quarles & Brady more than $1.5 million. In an interview in July, George H. “Hank” Amos III, the CEO and president of Tucson Realty & Trust Co., predicted he and Good would replicate the successful auction they conducted for Quarles & Brady about a decade ago during the Diocese of Tucson’s bankruptcy. “We sold every single one,” Amos said of the Tucson properties. “They sold their properties for more than what they appraised for.” Amos credited those high prices to supporters of the Diocese of Tucson who wanted to help out the church, and he said he assumed the same thing would happen with the Diocese of Gallup’s auctions. Extremely low prices That, however, did not happen. Almost all of the Diocese of Gallup’s properties sold for far less than their actual or assessed values. The Phoenix auction, which only generated $58,960 for the sale of about a dozen properties in Arizona, saw extremely low sales prices. The highest sales price of $26,400, which included the 10 percent buyer’s premium, was paid for three parcels being used by the Vincent de Paul Society’s Food Bank in Winslow, Arizona. The remaining properties sold at a fraction of their value, with prices ranging from $110 to $7,700. The Albuquerque auction, which generated total sales of $166,106 for 23 New Mexico properties, included four five-figure sales prices. The diocese’s lot on Aztec Avenue and Fourth Street in Gallup sold for $55,000, which is about half of its assessed value. A building in Farmington used by Catholic Charities sold for $44,000. The 64 parcels of land that make up La Vega Estates near San Rafael sold for $38,500, and a vacant piece of land in Farmington brought in $12,100. All the remaining New Mexico properties sold for prices ranging from $121 to $4,400. The Diocese of Gallup garnered negative publicity for the sales of the food bank property in Winslow and the Catholic Charities building in Farmington when Debe Betts, the director of Catholic Charities, told a Farmington reporter the diocese was selling the property out from underneath the nonprofits. Questions about marketing So why were the Diocese of Gallup properties sold at fire sale prices? Were the auctions poorly attended, and were they poorly advertised and promoted? Since the public was barred from attending the Albuquerque auction, the level of attendance and bidding participation is unknown. When Quarles & Brady attorneys requested court permission to sell the diocese’s unwanted property, they promised a “heavily marketed” campaign that would feature press releases, background kits, interviews, editorial columns, editorial board visits, radio advertising, direct and electronic mail promotions, and a telemarketing campaign. Amos and Good were then paid $45,000 to do that work. Susan Boswell, the diocese’s lead bankruptcy attorney, was asked if she received proof from Amos and Good that such a marketing campaign was conducted, along with questions about some apparent errors in the auction report figures. Boswell, however, declined to respond. Attorney James Stang, legal counsel for the Official Committee of Unsecured Creditors that represents the interests of clergy sex abuse claimants, also declined to comment on how effective he believed the campaign had been. Online news reports indicate only two newspapers outside of Gallup, along with one business blogger, published any articles about the auctions. This is in contrast to the Diocese of Gallup’s campaign to advertise its deadline for clergy abuse survivors to file claims with the U.S. Bankruptcy Court. That campaign was heavily marketed and resulted in 57 claims being filed.

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