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Archdiocese panel gives cardinal OK to seek bankruptcy
By Associated Press, 12/04/02
BOSTON -- A committee that oversees the Boston Archdiocese's finances gave Cardinal Bernard Law permission Wednesday to file for bankruptcy on behalf of the archdiocese in the wake of a string of potentially crippling lawsuits over sexual abuse by priests.
If Law decides to pursue the bankruptcy filing, he would need the approval of the Vatican.
It would be the first time a Roman Catholic archdiocese in the United States took that step, and would give a secular court control over its finances and open it up to unprecedented scrutiny.
"We believe a mediated resolution would be preferable to seeking Chapter 11 protection and remain hopeful that this process currently under way will be successful," said archdiocese spokeswoman Donna Morrissey in a statement released Wednesday night.
"However, we feel it is also necessary to carefully consider the alternative or complementary approach of a Chapter 11 reorganization."
The archdiocese, facing lawsuits from some 400 alleged victims of sexual abuse by clergy, has been pondering the possibility of bankruptcy at least since this past summer.
By filing for bankruptcy, the archdiocese would admit liability, but Law would not longer have to answer questions in pretrial depositions and archdiocese attorneys would not have to release any more priests personnel files to plaintiffs' lawyers.
The decision on Wednesday by the archdiocese's Finance Committee comes just a day after the archdiocese's own personnel files were released concerning priests facing allegations of sexual abuse, drug use and other nefarious deeds.
A Superior Court judge ordered the church to turn over the documents on some 83 priests, and the first round of files -- or some 3,000 pages -- pertaining to eight of those were released Tuesday.
Many of the priests whose personnel files are being released are not targeted in the lawsuits. However, the plaintiffs' attorneys hope the documents show the archdiocese had a habit of transferring priests to other parishes even after accusations of child abuse.
Plaintiffs' lawyers have called the archdiocese's consideration of a bankruptcy filing "intimidation" and "grandstanding"
No U.S. diocese is known to have filed for bankruptcy, though dioceses in Dallas and Santa Fe, N.M., were brought to the brink in the 1990s. Dallas reached a $30 million settlement in the case of pedophile and former priest Rudy Kos. And Santa Fe had to borrow from parish savings accounts to pay more than $50 million to settle 40 abuse cases.
A bankruptcy filing would put litigation against the archdiocese on hold. It could help the archdiocese get a better handle on what it will owe alleged victims, which could in turn assuage donors.
But it would transfer ultimate financial control of archdiocese assets to a bankruptcy court.