Jesuit case deadline passes; schools fighting liability link
More than 500 people have filed claims accusing Jesuits of sexually abusing children across the Northwest.
The claims vary in severity and span decades and geography, from Native Alaskan village children to students at Gonzaga Prep.
People were required to file their allegations by Nov. 30, a deadline imposed by the federal judge overseeing the Chapter 11 bankruptcy of the Oregon Province of the Society of Jesus. That organization includes Jesuits in Oregon, Washington, Idaho, Montana and Alaska.
The Jesuits already have settled 200 additional sex-abuse claims.
Among them were claims by 110 Alaska Natives, who settled for $50 million last year. About $45 million of that was paid by insurers.
The Jesuits claim to have so far spent about $25 million – depleting the treasury of the province. In bankruptcy documents the Jesuits claim to have $4.8 million in assets and liabilities of $61.8 million.
Yet many of the 500 alleged victims left to seek payouts in Bankruptcy Court assert the province remains a wealthy organization that misstated its financial standing in Bankruptcy Court records. They contend the Jesuits control and own Gonzaga University, Gonzaga Preparatory School, Seattle University and other schools and properties.
Much like the parish ownership dispute that played out in the now-closed bankruptcy of the Catholic Diocese of Spokane, the ownership of Gonzaga and the other schools could be the dominant issue in the Jesuit bankruptcy.
Attorney James Stang, who represented a creditors committee in the Spokane Diocese case, now represents a similar committee of victims in the Jesuit case.
He has won court approval to take limited depositions and conduct some discovery of internal documents.
“The judge gave us a toe in the door,” he said. “We’ll see what happens and if we can develop a viable theory” that Gonzaga and other properties are owned by the province and thus part of the financial estate available to pay claims.
Gonzaga University is fighting every attempt to link its fortunes to the province. Separately incorporated and registered 125 years ago, the private college with 7,200 students will not volunteer money or other resources to settle the bankruptcy, said Mike Casey, Gonzaga’s corporation counsel.
“We are not willing to either participate in this bankruptcy nor help resolve it,” he said.
Alleged victims and their attorneys are employing what Casey called the “big tent theory,” which uses the threat of future big-dollar payouts against organizations with any hint of liability to instead coerce smaller payments now.
“Creditors have run this play before with success. But not this time,” Casey said. “Sorry, but we won’t fall for it.”
The university steadfastly denies any liability for the actions of Jesuits who sexually abused children, including former university President John P. Leary, who sexually abused boys until Spokane police gave him a 24-hour ultimatum in 1969 to leave town or face arrest.
Leary fled, and the Jesuit hierarchy relocated him.
It took the Jesuits 37 years to reveal the scandal and cover-up. Leary died in 1993, and the Jesuits have acknowledged paying money to settle allegations brought by his victims.
On a separate legal front, the Oregon Province is engaged in a dispute with insurers regarding the scope of policies.
They have hired James R. Murray, who was widely credited with wringing $20 million from insurance companies to help settle the Spokane Diocese bankruptcy.
It was that money, together with $10 million from parishioners, the sale of diocese assets, bank loans and promissory notes collateralized by parish property, that finally brought the diocese bankruptcy to a close in 2007.
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