The Roman Catholic Diocese of Spokane now says that it overstated the number of alleged sexual abuse victims who haven’t filed lawsuits, a disclosure that could undermine the validity of a key creditors’ committee.
When the diocese filed for Chapter 11 bankruptcy protection last December, it did so with the caveat that the more than 60 people who had filed lawsuits weren’t the only victims of pedophile priests.
Court documents said the diocese was aware of at least 70 other alleged victims who had chosen not to sue. That group is now estimated at 12 people.
The number was significant at the time because the U.S. Trustee’s Office used it as a basis to form a creditors’ committee to represent the interests of all alleged victims. Creditors’ committees have enormous power because of their role in making decisions affecting those owed money.
That original committee ultimately proved dysfunctional. Victims who had filed lawsuits worried that the diocese had inflated the number of potential claimants to influence the makeup of the committee. The diocese rejected that notion.
To end the legal wrangling, the U.S. Trustee appointed two committees: one representing those with lawsuits, and the other representing people who had not yet filed legal claims. Each has equal power to affect the outcome of the case.
Maintaining two committees has been expensive for the diocese, which has to cover the legal costs. The law firm representing litigants submitted a $198,510 bill for two months of work earlier this year. The firm for alleged victims who have not sued has billed $248,042 for January through March.
Unraveling the numbers was akin to solving a mystery, according to Seattle attorney Tim Kosnoff, who represents those who have filed lawsuits.
“There was a vetting we were forced to do because we were highly skeptical of the diocese claims last December of some 70 undisclosed claimants,” he said.
Kosnoff said he and attorney Michael Pfau, who also represents litigants, used public records and their own private investigations to challenge the numbers. A protective order shielding the identity of potential victims made the task more arduous.
Regardless, Kosnoff and Pfau initially reduced the 70 claims to 63, and then were able to determine conclusively that 15 of the remaining 63 were either dead or were actually part of the other group of litigants. Diocese attorneys accepted those findings, then independently scrutinized the remaining 48 and indicated that there were 36 “that they believed were unlikely to ever result in a claim,” Kosnoff said.
That left 12 potential victims.
Diocese attorney Shaun Cross agreed with Kosnoff’s assessment. However, he called the number of potential claims “a moving target.”
He said there may be 17 more potential victims who have come forward within the past month.
“What we’re attempting to do is disclose to the court every possible (victim) who could be out there,” Cross said.
The diocese routinely receives information about potential claims that it must examine, he said, dismissing the idea that the diocese may have attempted to shape the creditor committees.
“This was an attempt to go the extra mile to ensure we had everybody,” Cross said.
Joseph Shickich, an attorney for the creditors’ committee representing claimants without lawsuits, disagreed that he may be representing a committee with dwindling membership.
“I don’t think those numbers are accurate,” he said, “not at all.”
When the final number of alleged victims is tallied – most likely in the fall – it will be higher than expected, he asserted.
That’s what has happened in the bankruptcy cases of the Diocese of Tucson, Ariz., and Archdiocese of Portland, he said.