Friday, November 25, 2005

Bankruptcy Disclosure Statement Filed By Archdiocese

The Federal Bankruptcy Code, 11 USC Sec. 1125, requires that in a bankruptcy reorganization, the debtor file a disclosure statement that is sent out to creditors who are asked to approve the reorganization plan. November 15 saw one of the most interesting ever disclosure statements filed. The Archdiocese of Portland filed its statement that, if approved by the court, will go out to creditors, including sex-abuse claimants. According to today's Catholic Sentinel, the disclosure statement says that the reorganization plan is designed to "fairly, justly, and equitably compensate valid Claimants . . . while allowing the archdiocese to continue its religious ministries, serve the spiritual needs of the faithful, and pursue its non-profit, charitable mission of service to those in need."

Currently the Archdiocese is arguing over which parish and school properties are available to creditors. (See related prior posting about Spokane case.) The disclosure statement says that if the archdiocese prevails, the compensation will be only about half as much as under last week's proposal-- shrinking from $40.5 million to $21.5 million. In the statement, the archdiocese said engaging the property dispute is in no one's best interest, since the case could take years.

The disclosure statement argues the Archdiocese side of the case: "All church property, whether held in the name of the archdiocese, the archbishop, a parish or a school, has been acquired with charitable donations made by parishioners, religious organizations, charitable foundations, and others. As such, the archdiocese asserts that much of the property titled in its name is held in trust, or is otherwise restricted, for the use of the benefit of the parishes, parishioners, parents, students and others who rely on the continued use of such property in order to practice their religion and educate their children, and that certain property is specifically designated for a particular purpose and can only be used for that purpose."