NEWS STORY: Portland Archdiocese Is First in Nation to Declare Bankruptcy

c. 2004 Religion News Service PORTLAND, Ore. _ The Roman Catholic Archdiocese of Portland announced Tuesday (July 6) it is filing for Chapter 11 bankruptcy protection rather than proceed with a priest-abuse trial scheduled to begin the same day. It is the first time an American Catholic archdiocese has ever sought bankruptcy protection. Archbishop John […]

c. 2004 Religion News Service

PORTLAND, Ore. _ The Roman Catholic Archdiocese of Portland announced Tuesday (July 6) it is filing for Chapter 11 bankruptcy protection rather than proceed with a priest-abuse trial scheduled to begin the same day.

It is the first time an American Catholic archdiocese has ever sought bankruptcy protection.


Archbishop John G. Vlazny said he attempted to seek a reasonable settlement in the case and another that was prepared to go to trial if the first one settled. But Vlazny said he could not risk going to trial because the suit sought $130 million in damages.

“This is not an effort to avoid responsibility. It is in fact the only way I can assure that other claimants can be offered fair compensation,” Vlazny said in a prepared statement.

The archdiocese and its insurers already have spent more than $53 million to settle more than 100 claims of priest abuse, the second-highest settlement figure in the nation.

Filing for bankruptcy automatically puts a halt to any trials. All of the remaining lawsuits _ more than 60 _ will go under the control of a bankruptcy judge.

“The pot of gold is pretty much empty,” Vlazny said.

Of the thousands of priest-abuse lawsuits filed against the Catholic Church in the last 20 years, only seven have gone through trial to a jury.

Experts say there are powerful reasons why so few cases end up in front of juries. Plaintiffs face a public and detailed airing of their sexual-abuse allegations. Church officials face the revelation of potentially embarrassing information, particularly in cases in which they knew about allegations against the priest and responded by moving him to another parish.

“They are extremely painful for all involved,” said Jeffrey Anderson, a Minnesota attorney who has represented hundreds of plaintiffs in priest-abuse cases, including three that went to trial.

“The church’s dirty laundry gets exposed,” he said.

The Roman Catholic Church also has an abysmal trial record: It has lost all seven cases that went to jury since the first one in 1986. Although the church has had some success on appeal, juries have returned verdicts ranging from $1.1 million to nearly $120 million.


The two Oregon cases scheduled to go to trial _ one as a backup if the first one settled _ involved the conduct of the Rev. Maurice Grammond, who has been accused of molesting more than 50 boys from the early to mid-1980s.

He had made the type of inflammatory remarks that can anger a jury.

“I’d say these children abused me,” Grammond said in a deposition taken before he died in 2002. “They’d dive in my lap to get sexual excitement.”

In the past when Vlazny has brought up bankruptcy, plaintiffs’ attorneys have said he was bluffing.

Given similar stakes across the country, most cases up to now have settled before trial. John Cotter, a lawyer who represented the Diocese of Stockton (Calif.) in a 1999 trial, said insurance companies usually make the call.

“They make a business decision,” said Cotter, whose case resulted in a $30 million verdict. “That’s probably why you haven’t seen a lot of these go to trial.”

If the risks to insurers remain high, attorneys say plaintiffs are changing their attitudes about going to trial.


Laurence Drivon, who represented the plaintiffs in the Stockton case, said people used to be more ashamed and more likely to settle rather than have the details of their case publicly revealed.

“That is changing. And the reason that it’s changing is because so many people have gone public,” Drivon said. “More and more of these clients are (demonstrating) not only a willingness, but an eagerness to go to trial for purposes of forcing the church to disclose information.”

After a Dallas jury returned a $120 million verdict in 1997, church officials said they were considering bankruptcy. The plaintiffs later settled for $23.4 million.

Church officials in Boston and Santa Fe, N.M., in the past said they were considering bankruptcy in the face of litigation. Church officials in Tucson, Ariz., recently said they would decide in September whether to seek bankruptcy protection.

KRE/PH END GREEN

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