August 12, 2006 in City

Victims seek $60 million

By The Spokesman-Review
 

Diocese bankruptcy

What happened

An attorney representing victims of sexual abuse by priests suggests parishioners pay

$30 million – or half the settlement cost – to get the diocese out of bankrupcy.

What’s next

A second round of federal mediation is scheduled to begin Aug. 21.

An attorney representing people who were sexually abused by priests said Catholics in Eastern Washington can settle their church’s sex abuse crisis and bankruptcy for $60 million – half of which he suggests could come from the pockets of parishioners.

Bishop William Skylstad already has $30 million at his disposal from asset sales, insurance settlements and pledges from the likes of Catholic Charities. The rest, another $30 million, could be raised through what those involved in negotiations are calling the “latte-a-day” plan.

“We’re not asking for anything that can’t be done,” said attorney Tim Kosnoff, who represents many sex abuse victims.

Attorneys representing various parties in the bankruptcy are known to be considering the plan following the Bankruptcy Court’s rejection of an earlier settlement agreement proposed by Skylstad.

Though $30 million may seem imposing, Kosnoff said, it’s achievable if the Catholic faithful are serious about paying for the grave actions of their clergy.

Potential numbers under the proposed plan might look like this: If, of the 93,000 Catholics in Eastern Washington, just 20,000 would help finance the settlement, the payment would be $2.05 per person per day for two years – less than the cost of a latte. If each of the 93,000 parishioners pay, the sum would be far less.

The calculation is offered to deflate the notion that victims are calling for the sale of churches and schools. Rather, a small daily sacrifice by fewer than one in four Catholics could end the bankruptcy and resolve a tragic chapter in the church’s history, said Michael Pfau, another attorney representing victims.

Skylstad led the Spokane Diocese into bankruptcy 20 months ago, largely in an effort to suspend potentially devastating lawsuits and shield parish property from jury verdicts.

Though the effort has worked, U.S. Bankruptcy Judge Patricia Williams said she wants the case resolved before December or she may dismiss it.

And Senior U.S. District Court Judge Justin Quackenbush ruled this summer that parishes are legally separate from the diocese, declaring them unassociated corporations with legal exposure.

The judges’ actions underscore the importance of a second round of federal mediation beginning Aug. 21.

Diocese attorney Shaun Cross declined to comment on the latte-a-day plan, citing the upcoming mediation.

Attorney Ford Elsaesser, who represents the Association of Parishes in the bankruptcy, also declined to comment. When the notion of suing parishes and Catholic laity first was broached last month, however, Elsaesser questioned the legal strategy and said parishes may be willing to pay $8 million toward a settlement but wouldn’t be intimidated. Anything more from the cash-strapped diocese would jeopardize the ministry and charitable works of the Catholic Church in Eastern Washington, he said at the time.

Kosnoff said suing parishes is not a bully tactic, but rather the legal path pointed to by Quackenbush’s ruling that parishes were independent of the diocese.

If a deal can be mediated, the entire episode may end. If not, parishioners must brace for the potential fallout: a failed bankruptcy experiment that could ultimately end with a liquidated diocese, restarted lawsuits that were temporarily suspended on the eve of trial, and victims directly suing individual parishes and potentially parishioners – especially those in leadership roles such as board and committee members.

Victims had been poised to amend their lawsuits on Friday to include parishes. Their lawyers, however, chose to wait. They say they will enter mediation with hopes of a deal. If mediation fails, they plan to file a separate bankruptcy plan and push for a rapid vote. Suing the parishes would come next, they say.

“The bishop has told us he doesn’t have the political power over the parishes,” Kosnoff said. “So here we are.”

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