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A tale of 2 church bankruptcies
Consensus vs. conflict
By Elizabeth Hardin-Burrola
Gallup Independent correspondent
religion@gallupindependent.com
January 12, 2019
ALBUQUERQUE – Just over five weeks into bankruptcy court proceedings, the Archdiocese of Santa Fe’s Chapter 11 reorganization case is featuring some familiar figures from the Diocese of Gallup’s bankruptcy.
However, if a hearing held Thursday is any indication, the Santa Fe bankruptcy promises a possibly more conciliatory tone and tenor than the Gallup Diocese’s often contentious three-year case.
Consensual was a word used several times by various officials Thursday, during the bankruptcy case’s meeting of creditors, known as a 341 hearing, which was conducted in Albuquerque’s historic federal courthouse by the Office of the U.S. Trustee.
The purpose of the hearing, as explained by Charles Glidewell, the Acting Assistant U.S. Trustee, was to have Archbishop John C. Wester, assisted by diocesan officials and attorneys, answer questions about the financial conditions of the archdiocese. The role of the Office of the U.S. Trustee, which is part of the U.S. Department of Justice, is to oversee bankruptcy cases and monitor financial information throughout the cases.
Thursday’s hearing offered comparisons of a few similarities and some stark contrasts between the Archdiocese of Santa Fe’s and the Diocese of Gallup’s bankruptcy cases.
All about leadership
Both cases feature some of the same officials, beginning with Judge David T. Thuma, who will be presiding over his second Catholic Church bankruptcy case. Albuquerque bankruptcy attorney Thomas D. Walker and his law firm will help represent the Santa Fe Archdiocese, just as they assisted the Diocese of Gallup. Another New Mexico law firm, Stelzner, Winter, Warbur ton, Flores, Sanchez & Dawes, P.A., which has defended both the Santa Fe and Gallup dioceses against many clergy sex abuse lawsuits and claims, has been retained as special counsel.
Los Angeles attorney James Stang, along with co-counsel Ilan Scharf of Pachulski Stang Ziehl and Jones, will once again serve as legal counsel for the Official Committee of Unsecured Creditors, which is made up of individuals who are survivors of clergy sex abuse. The Gallup committee had five men and two women, while the Santa Fe committee has eight men and just one woman.
Thus far, the key differences in leadership will be the marked by the decisions and actions of Archbishop Wester and his lead bankruptcy attorneys, Ford Elsaesser and Bruce A. Anderson of Coeur d'Alene, Idaho. In the Diocese of Gallup case, Bishop James S. Wall’s lead bankruptcy attorney was Susan Boswell of Tucson, Arizona, whose courtroom style was oftentimes aggressive.
Another significant difference is the addition of oversight by the Office of the New Mexico Attorney General. With the public announcement of the attorney general’s investigation into clergy sex abuse in September, attorneys with the AG’s office are now following developments in the Archdiocese of Santa Fes bankruptcy case.
Civil and courteous
The atmosphere during Thursday’s hearing was remarkably civil, courteous and tension-free as Wester, Chief Financial Officer Tony Salgado, Chancellor Thomas P. Macken and attorney Elsaesser patiently answered questions for nearly three hours from Glidewell, Stang and three members of the creditors committee.
Glidewell and Stang’s questions focused mostly on financial information, such as assets, bank account funds, investments, as well as questions about property – when and why property was transferred from archdiocesan ownership into trusts held for parishes, questions concerning the value of property – and the legal and financial relationships between the archdiocese and its parishes.
The three committee members focused more on issues of interest to clergy sex abuse survivors, questioning the archbishop about therapy services available to abuse survivors and Wester's openness to publicly releasing church records that document clergy sex abuse – and even a memorial museum similar to a Holocaust museum.
In contrast, the Diocese of Gallup's 341 hearing, held in December 2013, was full of tension and drama as attorneys for the diocese sparred with attorneys for abuse claimants and no abuse survivors were invited to ask questions of the Gallup bishop. Also noticeably absent was Deacon James P. Hoy, the diocese’s former chief financial officer, who had resigned his position two months before Bishop Wall announced his decision to file a Chapter 11 petition. That left Wall, with the assistance of his newly-hired bankruptcy accountant, struggling to answer questions about the diocese’s finances.
On Thursday, Wester and Elsaesser appeared to hit all of the right notes. Wester said he hoped the bankruptcy case would “bring some measure of justice” to survivors of clergy sex abuse, and Elsaesser promised to work consensually and expeditiously with Stang and the creditors committee to locate abuse survivors across the diocese and to address and fairly compensate all claims of clergy sex abuse.
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