Tucson diocese bankruptcy proceedings under way

Arizona Daily Sun/September 29, 2004

Tucson -- A judge overseeing the Catholic Diocese of Tucson's bankruptcy reorganization ordered lawyers to begin discussions next week on setting a deadline for sex abuse victims to file claims. At an initial hearing Tuesday, Bankruptcy Judge James Marlar also authorized the diocese to pay some ongoing basic expenses, issued instructions and set a hearing schedule.

On Sept. 20, the diocese became the second in the nation to file for Chapter 11 bankruptcy protection in the face of continuing litigation from clerical sex abuse cases.

It listed assets of $16.6 million and debts of $20.7 million in its filing.

Those figures don't include parish properties, which plaintiffs' lawyers contend should be included among diocesan assets, nor liabilities that could result from 22 pending sex abuse lawsuits.

The Archdiocese of Portland, Ore., filed for bankruptcy reorganization on July 6.

Marlar told lawyers he wants a case management status hearing on Oct. 7, including an inventory of the issues that lawyers may have to argue, and what the claims against the diocese are.

"For example, if property of the estate is a major issue, what are the claims?" Marlar told lawyers.

He said lawyers should discuss a proposal that the diocese has put forth in its reorganization plan for a 90-day filing deadline for any more claims of clergy sex abuse. He said he hoped all parties would focus on an agreeable limit, and he could decide on a filing time limit at another hearing Oct. 25.

Such a deadline would effectively cut off compensation for victims not filing.

Members of an advocacy group for abuse victims have criticized any proposed deadline and issued a letter urging Bishop Gerald F. Kicanas to rescind any deadline.

"This whole notion is predicated on dubious and self-serving assumptions," officials of the Survivors Network of those Abused by Priests wrote.

Diocesan spokesman Fred Allison said the proposed reorganization plan filed last week with the bankruptcy petition would set aside part of a litigation settlement pool for anyone not meeting the scheduled deadline because of repressed memory.

Opponents argue that minors -- particularly Spanish-speaking victims -- would be least likely to file claims within a short time frame.

The diocese would provide counseling for anyone abused without regard to a deadline, Allison said.

Marlar said he wants "to avoid long, drawn-out, costly, emotional trials."

He approved unopposed diocesan motions to allow payment of utility bills, wages, workers' compensation and self-insurance premiums.