Saturday, November 21, 2009

ONGOING COVERAGE: SPOKANE DIOCESE BANKRUPTCY

$11.7 million: Deposited Monday?$44 million: Total in victims trust

Diocese meets deadline

Bankruptcy over sex abuse nears end

Dorothy Axtell, left, and Janet Kosch pray Monday during the Adoration of the Blessed Sacrament at St. Thomas More Church in Spokane. The Spokesman-Review (JED CONKLIN The Spokesman-Review) Previous coverage: S-R Newstrack

John Stucke
Staff writer
October 2, 2007

The Roman Catholic Diocese of Spokane and its 82 parishes are sewing shut a devastating chapter for the Eastern Washington church.

On Monday, the parishes, diocese and Bishop William Skylstad wired $11.7 million into a special bankruptcy trust to push the total received by the trust to $44 million, outpacing most expectations.

The first funding deadline was Monday, when the trust was required to contain a minimum $37 million of an eventual total of $48 million.

Victims can expect to receive payments next month.

Though most financial issues in bankruptcy court are public, the settlement in the diocese case contained sensitive privacy restrictions promised early in the case to victims. Those restrictions now include keeping secret how many victims are paid, how much they receive, how many victim claims were ruled fraudulent, and how many priests were accused in court claims of sexually abusing children.

The diocese keeps a list of priests it considers "credibly accused." As of Monday, it had been updated to include 14 men, including five deceased.

During a call-in court hearing Monday, U.S. Bankruptcy Judge Patricia Williams approved paying lawyers about $8.3 million – the last controversial element in a case that has lasted nearly three years.

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The lawyers, including those representing Skylstad and the diocese along with those representing creditor committees, worked out a payment scenario in September that avoided a court fight. The U.S. Trustee's Office, which watchdogs bankruptcy cases, signed off on the agreement.

Diocese attorney Shaun Cross said during the court hearing that the entire $48 million settlement balance would be fully funded by the final deadline of October 2009.

In all, parishes have raised about $7 million of the $10 million they owe, through methods ranging from bake sales to car washes to suggesting that parishioners charge donations to credit cards.

The remaining $3 million parishes owe will be borrowed from AmericanWest Bank, of Spokane.

At the same time, Skylstad has been raising his share: about $6 million that is not supposed to come from the parishes. The diocese has declined to elaborate on how the bishop is obtaining the money.

In addition to the bishop's $6 million commitment, the diocese also has raised money separately through insurance settlements, and selling buildings and land.

Williams said she was pleased with the funding progress and approved the lawyer fees, which drew objections from the U.S. Trustee.

The professionals bill in six-minute increments, and in this case charged rates mostly between $200 and $300 an hour.

They were often accused of charging too much by having multiple lawyers participating in routine matters and performing tasks that could be done by less expensive support staff.

To ease the criticism and finish the fee issue, the lawyers agreed to trim about 5 percent, or $400,000, from their bills.