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Gallup Diocese bankruptcy costs top $4.1 million
By Elizabeth Hardin-Burrola
Gallup Independent correspondent
religion@gallupindependent.com
Oct. 5, 2016
ALBUQUERQUE – The Diocese of Gallup’s bankruptcy costs have surpassed $4.1 million as attorneys, accountants and other professionals in the case are submitting their final compensation applications for approval to U.S. Bankruptcy Judge David T. Thuma.
According to the court file, the following professionals have submitted payment applications totaling $4,110,970. Under the Gallup Diocese’s plan of reorganization, a trust of approximately $22,975,000 was funded by the diocese, seven other Catholic entities and three insurers, with the bulk of the funds going to compensate clergy abuse claimants.
* Quarles & Brady LLP: The Diocese of Gallup’s general reorganization and restructuring legal counsel submitted a final application totaling $2,343,917. That figure includes $2,234,013 for professional fees and $109,904 for expenses. However, the law firm voluntarily wrote off and reduced its legal fees by $324,376. Quarles & Brady’s application for payment was filed Aug. 26 and was approved by Thuma on Sept. 21.
* Pachulski Stang Ziehl & Jones LLP: This California law firm served as the legal counsel for the Official Committee of Unsecured Creditors, which represented the interests of clergy sex abuse claimants in the bankruptcy case. Although the law firm requested fees of $1,168,031 and expenses of $98,203 for a total of $1,266,234, the firm wrote off $240,481 and also agreed to a voluntary reduction of $245,394, bringing the final total down to $1,020,839. The firm’s application for payment, filed Sept. 23, is pending with the court.
* Keegan, Linscott & Kenon P.C: This Tucson accounting firm oversaw the Gallup Diocese’s finance office. The firm submitted an application for $486,081, which includes $475,925 in fees and $10,155 in expenses. However, the application, which was filed Sept. 2, states the firm “will ultimately be paid a lesser amount” based on a professional charges cap outlined in the plan of reorganization. The specific reduction amount is not stated.
* Walker & Associates P.C.: The diocese’s Albuquerque bankruptcy law firm filed a final fee application Aug. 26. The firm requested payment of $145,675, which includes professional fees, expenses and New Mexico gross receipts taxes. The court approved the request Sept. 26.
* Insurance Archaeology Group: On Sept. 1, a final application for professional compensation was formally submitted to the court on behalf of this insurance research firm. However, court records indicate the Gallup Diocese has already paid the total amount of fees and expenses of $48,819.
* Unknown claims representatives: This official’s responsibility is to represent the interests of any clergy sex abuse claimant who might come forward in the future. The first unknown claims representative was Michael P. Murphy, who resigned earlier in the year. Upon his resignation, Murphy waived his professional fee but was paid $7,291 for expenses. The current representative is Michael R. Hogan, a retired judge. On Aug. 31, Hogan submitted an application for payment of $45,363, which includes $40,232 for fees and $5,130 for expenses.
* Stelzner, Winter, Warburton, Flores, Sanchez & Dawes P.A.: Also on Aug. 31, the diocese’s special counsel law firm in Albuquerque submitted a final application for $12,985. That figure includes $12,478 in legal fees and $507 in expenses and New Mexico gross receipts taxes.
These costs comprise most of the professional fees and expenses in the Diocese of Gallup’s bankruptcy case. However, the diocese has also paid $45,000 in fees for property auctions in Phoenix and Albuquerque; $22,100 for property appraisals; and a number of smaller bankruptcy-related fees and expenses to other professionals and diocesan employees. In addition, the diocese has been paying quarterly fees of $5,200 to the U.S. Trustee Program, which oversees the administration of bankruptcy cases.
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