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Archdiocese Closer to Bankruptcy Filing

Dec 5, 2002 | AP The Boston Archdiocese, struggling to contend with a flurry of sex abuse lawsuits, has moved closer to a remedy usually associated with troubled businesses and people buried in debt: a bankruptcy filing.

A financial panel of the archdiocese gave Cardinal Bernard Law permission Wednesday to file for bankruptcy, a move that would give a secular court control over its finances and open it up to unprecedented scrutiny.

No Roman Catholic archdiocese in the United States has ever filed for bankruptcy, which requires approval from the Vatican. The Vatican declined to comment except to say church officials were following the situation closely.

The step toward bankruptcy troubled some lawyers of alleged abuse victims who are negotiating with the archdiocese toward possible settlements. Attorney Mitchell Garabedian said archdiocese leaders were bluffing in an attempt to gain leverage.

Roderick MacLeish Jr., whose law firm represents more than 200 alleged victims, said if the church does file for Chapter 11 protection, he wants the cardinal to "explain to a bankruptcy judge why he should be permitted to remain in his palatial residence while the victims of clerical sexual abuse lie wounded."

The archdiocese has been at the center of the abuse scandal that has engulfed the U.S. church since January. It is negotiating with attorneys for some 400 alleged victims.

"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," archdiocese spokeswoman Donna Morrissey said.

"However, we feel it is also necessary to carefully consider the alternative or complementary approach of a Chapter 11 reorganization."

Morrissey said she did not know when Law will make a decision.

A bankruptcy filing would put litigation against the archdiocese on hold. It could also help the archdiocese get a better handle on what it will owe alleged victims, which could in turn assuage donors who have yanked support from the church because of the abuse scandal.

But it would transfer financial control of church assets to a bankruptcy judge.

The decision by the archdiocese's Finance Committee came one day after hundreds of pages of archdiocese personnel files were released concerning priests facing allegations of sexual abuse, drug use and other misconduct.

Many of the priests involved are not targeted in the lawsuits. However, the plaintiffs' attorneys hope the documents show a pattern of transferring priests to other parishes even after accusations of child abuse.

Earlier this year, the finance council rejected a proposed settlement worth up to $30 million for 86 victims of defrocked priest John Geoghan. Garabedian was forced to renegotiate and the two sides agreed on a $10 million settlement.

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 church officials had to borrow from parish savings accounts to pay more than $50 million to settle 40 abuse cases.

Separately, Morrissey confirmed that the archdiocese has barred church agencies from meeting at the parish of the Rev. Walter Cuenin, a frequent critic of Law, The Boston Globe reported Thursday.

The order, in an e-mail Tuesday, came after Cuenin invited more than 100 colleagues to meet Friday at his Newton parish to discuss concerns about the archdiocese's plans to continue a fund-raising drive amid bankruptcy talk and the abuse scandal, the Globe reported. The e-mail said Law made his decision because of "some past issues, as well as current issues now being addressed."

Cuenin occasionally has been summoned to the archdiocese for comments that were perceived as too liberal, including support for same-sex marriage. He also is a leader of the Boston Priests Forum, which has advocated due process for priests accused of molestation.

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