Plaintiffs fight trustee’s decisions

Alleged victims of sexual abuse by priests filed a toughly worded rebuke of the U.S. Trustee and the creditors’ committee she appointed in the Spokane Catholic Diocese bankruptcy case.

Asserting that U.S. Trustee Ilene Lashinsky was wrong when she appointed Catholic Church sympathizers to the key victims’ committee during the bankruptcy, well-known Seattle attorney Dillon Jackson asked federal Judge Patricia Williams to intervene.

“For reasons that are inexplicable, the United States Trustee placed control of the committee in church loyalists,” Jackson wrote in the motion. “(The trustee) abused her discretion by acting arbitrarily and capriciously in the selection of the members of the committee as well as in her failure to remedy the problems …”

The local office of the U.S. Trustee declined to comment on the accusations. A telephone message left with a spokeswoman in Washington, D.C., was not returned. The capital was virtually shut down by inauguration festivities.

The makeup of the creditors’ committee has been a thorny issue in the bankruptcy case. Lashinsky’s five appointments, which included only two people who have filed lawsuits, caused an immediate uproar and divided victims into camps. There are about 62 people that have filed lawsuits seeking damages and perhaps about 70 others who have not filed suits. Of the 70, some have not yet come forward while others have sought diocese-funded counseling.

Creditors’ committees help steer Chapter 11 bankruptcy cases by representing those owed money. The Spokane diocese bankruptcy is the third such case filed in the United States. Lashinsky has been the trustee in each and appointed similar committees.

Line by line in his motion, Jackson, of the firm Foster Pepper and Shefelman, took aim at the trustee and the three committee members Jackson called loyalists. He said the three members don’t want to collect money from the diocese, other than perhaps counseling funds and a symbolic $1.

Those filing lawsuits seek millions of dollars in damages.

Furthermore, Jackson said two members don’t even have claims to assert. One member settled several years ago, he said, and another was sexually abused by a priest who wasn’t working for the diocese.

The motion didn’t stop there. Jackson and plaintiffs contend that a counselor paid by the diocese encouraged victims who hadn’t filed lawsuits to apply for a seat on the committee.

The Rev. Steve Dublinski, the diocese’s vicar general, said the diocese “had nothing to do with the formation of the committee.” As for the counselor paid by the diocese: “I don’t know what role she played, if any,” Dublinski said. “But the diocese played no role.”

Jackson, along with Frank Conklin, another plaintiffs’ attorney and former dean of Gonzaga University’s Law School, also sought to undermine the hiring of Riddell Williams, a top-tier Seattle firm, to represent the creditors’ committee.

Plaintiffs say that the firm is too closely tied to the Catholic Church and that attorney Joseph Shickich has a conflict of interest. Although the motion didn’t detail the concerns, Shickich did disclose that several members of his firm are Catholics and belong to parishes within the Archdiocese of Seattle. Furthermore, Shickich received a bachelor’s degree from Notre Dame, a Catholic university, in the 1970s.

Also causing some concern is the church activity of Shickich’s wife.

Contacted Thursday, Shickich said he could not comment for this story. Instead, he referred all questions regarding conflicts of interest to sworn statements submitted to the bankruptcy court.

He disclosed that his wife, Barbara Shickich, a law firm principal, became a member of the pastoral council of St. Joseph’s Parish in Seattle last May. She has since resigned her membership.

In a separate filing that challenges the hiring, attorney Conklin pointed to Riddell Williams’ work for the Seattle Archdiocese in negotiating an environmental indemnity agreement. Property was gifted to two parishes within the archdiocese, and Conklin said that although details were unknown, the cost of environmental remediation was high.

That work, Conklin said, posed grave conflicts of interests for the firm.

Ford Elsaesser, an attorney representing the 81 parishes within the Spokane Diocese, called the entire legal fight disheartening.

“It’s sad to see so much time and money spent on this sort of dispute,” he said. “It can only delay the case and make it more expensive.”

A veteran of more than 100 Chapter 11 cases, he questioned whether Judge Williams would overturn Trustee Lashinsky’s appointments.

“I don’t know of any precedent in the Northwest, or any bankruptcy jurisdictions for that matter, where a judge has taken on the role of the U.S. Trustee,” he said. “It seems to be a pretty tall order.”