PORTLAND, Ore. — Facing financial pressure from impending trials on sex
abuse claims, the Archdiocese of Portland July 6 filed for Chapter 11
bankruptcy. It is the first Catholic diocese in the United States, and
perhaps the world, to seek the legal protection.
The move, described as a last resort, means that multimillion-dollar
suits now pending against the archdiocese will be settled in federal
bankruptcy court along with possible future claims. Parish and school
activities and ministries will continue, officials said.
"This action offers the best possibility for the archdiocese to resolve
fairly all pending claims, to manage a difficult financial situation and to
preserve the ability of the archdiocese to fulfill its mission," said
Portland Archbishop John G. Vlazny at a press conference, where he was
joined by archdiocesan officials and advisers. "It will also allow us to
continue our good works without fear of an impending large verdict."
Two abuse trials were set to begin just hours after the announcement, but
were halted. The plaintiffs were seeking a total of $155 million.
The archdiocese has settled more than 100 other claims and said it has
made efforts to settle these claims as well.
"I am committed to just compensation," the archbishop said in a letter
sent to parishes this week. "These demands go beyond compensation. With 60
other claims pending, I cannot in justice and prudence pay the demands of
these two plaintiffs."
Over the past four years, the archdiocese and its insurers paid $53
million for the more than 100 claims, the highest per-capita payments made
by any diocese.
"We have kind of emptied the pot," Archbishop Vlazny told reporters,
adding that it has been difficult to borrow money.
The two suits about to begin named the late Maurice Grammond, a former
priest of the archdiocese. Almost 50 people have claimed that Grammond
molested them. The incidents go back to the 1950s.
The archbishop -- who went through a trial of an accused priest when he
was bishop in Winona, Minn. -- said going to court is hard on both the
victims and the defendants. He also noted the "great financial risk" posed
by the trials, saying defense attorneys might try to claim parish assets,
school money and trust funds for their clients.
Archbishop Vlazny described bankruptcy as the best choice "if I am to be
a prudent steward of our resources." He told reporters the archdiocese has
been "abandoned" by insurers and said he hopes the bankruptcy will bring the
companies back.
"Parish assets are not the archdiocese's assets," the archbishop said,
citing canon law.
In late June, Bishop Gerald F. Kicanas of Tucson, Ariz., announced his
diocese was considering bankruptcy, saying it is the diocese's only option.
There, 100 people had alleged abuse against 126 priests.
The idea of bankruptcy sparked protests. Critics said it allowed the
church to avoid its responsibilities.
But like Archbishop Vlazny, Bishop Kicanas described Chapter 11
bankruptcy as the only way to ensure the ability to respond to the bulk of
legal demands.
The archbishop reported that some Catholics have told him they have
stopped donating to the archdiocese because of the claims. But, he said,
some current donors have increased giving and new contributors have stepped
forward.
Collections have increased for the annual Archbishop's Catholic Appeal,
which supports people with disabilities, family life ministry, seminary
education, Catholic schools, youth ministry, ethnic groups and other
projects. The archbishop urged parishioners to maintain their support.
He told reporters that he consulted during the July 4 weekend with mostly
lay financial advisers and a clergy panel and others before taking the
bankruptcy step.
One man picketed outside the pastoral center during the press conference.
"I am here for victims all over the U.S.," said Norman Wick Sr., a
Portlander who has a claim pending against a priest and several women
religious in Albany, N.Y.
As he has many times, Archbishop Vlazny again apologized to those harmed
by abuse, saying the bankruptcy filing will help him "renew my commitment to
help you to heal."
As he opened the July 6 press conference, Archbishop Vlazny noted he had
just presided at a Mass celebrating the feast day of St. Maria Goretti. In
1902, the 12-year-old Italian girl was slain by a would-be sexual abuser.
When she was canonized in 1950, the killer knelt at the girl's grave and
prayed. "That," the archbishop told the press corps, "is the kind of healing
and reconciliation we are trying to accomplish."