US diocese claims bankruptcy

The archbishop of Portland, the main city of the state of Oregon, Reverend John Vlanzny took the step as two major cases against the church stemming from alleged sexual abuse by its priests were set to go to trial.

The action will suspend the start of a civil trial of Reverend Maurice Grammond, a priest accused of molesting more than 50 boys but who died two years ago.

“This is not an effort to avoid responsibility,” said the archbishop in a statement.

“It is in fact the only way I can assure that other claimants can be offered fair compensation.”

In one of the cases due to go to trial today, plaintiffs are demanding $A183 million in damages, while another case is seeking $35 million from the Portland branch of the Catholic church.

“We have made every effort to settle these claims fairly but the demand of each of these plaintiffs remains in the millions. I am committed to just compensation,” Rev. Vlazny said.

But he added: “These demands go beyond compensation. With 60 other claims pending, I cannot in justice and prudence pay the demands of these two plaintiffs.”

The archbishop said his diocese had already settled more than 100 claims against it over the past four years, paying almost $30 million out of its own funds in the last year alone.

“We have worked diligently to settle claims of clergy misconduct,” he wrote. “Major insurers have abandoned us and are not paying what they should on the claims.”

The 60 or so pending cases will now go under the control of a bankruptcy court.

The archdiocese is the first of 195 in the United States to file for so-called Chapter 11 bankruptcy protection, which gives an organisation freedom from legal action by creditors as it reorganises, but gives up some control over finances to the courts.

“At this point, circumstances beyond my control have created great financial risk. Seeking the protection of bankruptcy is a just and prudent course of action,” Vlazny wrote, adding that the church’s operations would be maintained.

In February this year, a report commissioned by the Catholic Church showed more than 4,000 of its priests in the US have faced sexual abuse allegations in the past 50 years.

Other dioceses, such as that of Tuscon in Arizona, have said they are considering bankruptcy,

But there are concerns the reasons for the bankruptcy have to do with the Church not wanting to take responsibility for what has happened.

David Slader, a lawyer for the plaintiff in one of the current cases, sais the diocese has “taken the cheap and easy way out, and ducked responsibility”.

Plaintiff James Devereaux, who is involved in the case against Rev. Grammond, said: “Today, the archdiocese filed bankruptcy, but they have been morally bankrupt my entire life”.

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