Spokane Diocese Wins Appeal In Bankruptcy Case

The Catholic Diocese of Spokane, Washington has successfully appealed a bankruptcy judge's August 2005 decision that said parish churches, schools and similar properties were all assets that could be liquidated to pay off Diocese creditors in its bankruptcy proceedings. Yesterday's Washington Post reports that U.S. District Judge Justin Quackenbush in Spokane has overturned the bankruptcy judge's decision. Quackenbush apparently agreed with the Diocese that while the Bishop holds formal title to parish properties, the beneficial interest is held by each parish. Quackenbush sent the case back to the bankruptcy court for it to determine the status of each individual parish. Shaun Cross, a lawyer for the Diocese, predicted that the decision will lead to serious settlement negotiations.