Church bankruptcy costs pass $3.2M Diocese of Gallup’s case begins its third year By Elizabeth Hardin-Burrola Gallup Independent correspondent religion@gallupindependent.com Nov. 9, 2015 ALBUQUERQUE – As the Diocese of Gallup begins its third year in U.S. Bankruptcy Court this week, the diocese’s legal fees and expenses now exceed $3.2 million. Attorneys, accountants and insurance researchers submitted quarterly billing statements totaling $542,211.27 for the three-month period of July 1 through Sept. 30, adding up to a total current cost of $3,247,076.58. The bulk of the fees and expenses were billed by the law firm that represents the interests of clergy sex abuse claimants and by the diocese’s lead bankruptcy law firm. However, the billing statements do not represent a completely accurate total of the Diocese of Gallup’s bankruptcy expenses. They do not include the $45,000 the diocese already paid Tucson Realty & Trust Co. of Arizona and Accelerated Marketing Group of California to conduct two property auctions in September. In addition, the statements do not include any payments the diocese made to law firms or other professionals prior to filing its Chapter 11 petition on Nov. 12, 2013. Unless otherwise stated, the following recent quarterly billing figures and total fees and expenses will not be paid until the Gallup Diocese has an approved plan of reorganization:  Quarles & Brady LLP: The Diocese of Gallup’s lead bankruptcy law firm from Tucson submitted a quarterly statement for $216,702.52 for legal fees and expenses. The firm’s total post-petition legal bill is now at $1,814,312.90. Keegan, Linscott & Kenon P.C.: This Tucson accounting firm has been overseeing the Gallup Diocese’s finance office for more than two years. The firm submitted a quarterly statement for $45,497.86 in fees and expenses. The firm’s total post-petition bill is now at $412,789.46. Stelzner, Winter, Warburton, Flores, Sanchez & Dawes P.A.: The diocese’s special counsel law firm from Albuquerque billed $231.52 in fees this quarter. The firm’s total post-petition bill is now at $12,131.34. Insurance Archaeology Group: This insurance research company submitted a quarterly statement for $890 in fees and expenses. To date the company has billed the Gallup Diocese $48,819, and thus far the diocese has paid Insurance Archaeology Group $47,929. Estate Valuation Consultants Inc.: This real estate appraisal company did not submit a statement for this quarter. To date the company has billed the diocese $22,100 and has received payment for that amount. Michael P. Murphy: Murphy was appointed as the “unknown claims representative” to represent any new clergy sex abuse victims who might come forward in the future. Murphy has not submitted any fees or expenses yet, but his flat fee of $50,000 will be due and payable upon the effective date of any plan of reorganization. Walker & Associates P.C.: The diocese’s Albuquerque bankruptcy law firm did not submit a statement for this quarter. To date, the firm has billed $18,062.40 in post-petition fees and expenses. Pachulski Stang Ziehl & Jones LLP: This California law firm is the legal counsel for the Official Committee of Unsecured Creditors, which represents the interests of clergy sex abuse survivors who have filed claims against the diocese in the bankruptcy case. Although the committee represents abuse claimants, the Diocese of Gallup is responsible for those legal fees. The law firm submitted a quarterly statement for $278,889.37 in fees and expenses. The firm’s total post-petition bill is now $918,861.48. The next court hearing in the bankruptcy case will be held Tuesday. Matters expected to be discussed include the third mediation session scheduled for Dec. 3-4, possible legal action against the diocese’s insurance companies, and motions to lift the automatic stay to allow certain clergy sex abuse claims to proceed to state court.

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