Victims say archdiocese bankruptcy reorganization plan inadequate

OregonLive ^ | 11/16/2005 | WILLIAM McCALL

[Clint Williams]

PORTLAND, Ore. (AP) — The Roman Catholic Archdiocese of Portland said in a bankruptcy reorganization plan it released Wednesday that paying $42 million to settle more than 100 pending sex abuse claims would be "fair and just."

But attorneys and activists representing alleged sex abuse victims slammed the proposed reorganization plan, saying the $42 million limit is too little and that the church is trying to cover up sex abuse cases by keeping them out of court.

"I honestly believe church officials fear the truth surfacing far more than any settlements paid," said David Clohessy, national director of SNAP, a victims group.

In July of last year, the Portland Archdiocese became the first in the nation to file for bankruptcy because of lawsuits by parishioners who say when they were youths they were sexually abused by priests. Two other dioceses filed for bankruptcy afterwards, but both have already filed reorganization plans.

The Portland Archdiocese filed its plan in U.S. Bankruptcy Court late Tuesday. The plan — which is subject to approval by creditors and the court — said there were 129 unresolved claims.

The plan noted that one of the key issues in the case — whether the archdiocese or its individual parishes and Catholic schools own its property — has not been resolved.

The reorganization plan repeated the archdiocese's argument that parish property should not be used to pay any claims.

The archdiocese said in the plan that it would appeal any U.S. Bankruptcy Court ruling that parish property can be used to pay claims. But if the court ruled the property cannot be considered an asset to pay claims, the settlement offer likely would be reduced by about half — to $21.5 million.

David Slader, an attorney for many of the alleged sex abuse victims, said the property ownership issue may be resolved by U.S. Bankruptcy Judge Elizabeth Perris at a Dec. 6 court hearing.

But he noted the church had access to enough money — including a $40 million stock and bond fund — to settle cases and avoid the property ownership issue well before the archdiocese filed for bankruptcy.

"If they had used those assets in the first place, they would not be in bankruptcy now," Slader said, "and parishes and schools would not have been placed in the position of having their assets jeopardized."

Archbishop John Vlazny said the reorganization plan "provides for fair and just compensation to victims who have been sexually abused."

But the archdiocese's proposal that settlements to alleged sex abuse victims be limited to an overall $42 million drew fire from their attorneys.

Slader said the limit would discourage victims from going to court and waiting for trial because of the risk that cases settled out of court in the meantime would deplete the fund.

Avoiding trial also helps the archdiocese keep secret details about the extent of alleged sex abuse by priests, Slader contended.

"That's the intent of the plan and has been from the very beginning," Slader said. "The archdiocese wants to cover up and prevent the full disclosure of the reprehensible nature of its conduct. It's camouflage."

Slader also said the plan is "confusing, convoluted and byzantine."

Vlazny, however, said the plan will finally resolve the claims and allow the church to move forward.

"We believe our plan is fair both to victims and to the 396,000 Catholics of Western Oregon, and the many, many people who benefit from the various ministries of the Archdiocese of Portland," Vlazny said in a statement e-mailed by the archdiocese.

Tom Stilley, an attorney for the archdiocese, said claims that were settled before the bankruptcy but have not been paid will be paid in full upon confirmation of the reorganization plan.

Stilley said the plan provides for resolution of unsettled claims under U.S. District Court supervision. Claims that cannot be settled can go to trial in federal court.

The plan also provides for possible future claims but any amount would be determined by a judge.

The archdiocese has recommended $42 million for known claims but said that additional amounts will be made available to pay all other claims.