Roman Catholic church, school property expected to be spared in Portland settlements

Tuesday, December 12th 2006, 6:12 am

By: News On 6

EUGENE, Ore. (AP) _ Roman Catholic church and school property are not expected to be part of the settlement agreement reached with the Archdiocese of Portland and 150 people who claim to have been sexually abused by priests who once worked in Western Oregon.

Ownership of parish and school property had been a major issue in the bankruptcy case the archdiocese filed in July 2004, when it became the first Catholic diocese in the nation to seek protection from creditors as the trial was set to begin in a massive lawsuit over alleged abuse.

The archdiocese contended that parish and school property was held in trust and not subject to claims, while attorneys for alleged victims argued the archdiocese was the owner and could sell property if necessary to pay any claims.

U.S. District Judge Michael Hogan, however, said Monday that all current and future claims could be covered by the archdiocese without selling off property held by parishes and schools.

``Most bishops are breathing a sigh of relief across the country,'' said Chuck Zech, professor of economics at Villanova University, who has been following the case closely. ``If you had asked me this a month ago, I would have said there was probably no way to pull this off without selling some worship sites.''

Hogan, who had been mediating settlement talks since September, announced the agreement Monday. It was to be filed with the U.S. Bankruptcy Court by Dec. 18.

Hogan did not give a dollar amount. But he said insurance companies have agreed to provide more than $50 million.

The proposed settlement left about 20 claims in dispute, but Hogan expressed confidence that an agreement would be reached.

Terms of the settlement will have to be incorporated into a new reorganization plan for the archdiocese. U.S. bankruptcy Judge Elizabeth L. Perris will have to rule that the reorganization plan is fair for all parties.

All parties to the litigation remained under a strict gag order.

Hogan said that, as part of the settlement, a ``healing'' service will be held for all the parties, including the victims of sexual abuse who sued the archdiocese, along with their lawyers.

The archdiocese had paid out $53 million in claims before going to bankruptcy court in 2004, with insurance covering about half. The cost of the bankruptcy case has already topped $15 million, according to court records.

``These are expensive lessons,'' Hogan said. ``All of our hope is, including the archdiocese, is that they have been learned.''

He added that the archdiocese will be reorganized so that the parishes and schools will be legally separate in future.

Three other dioceses _ Tucson, Ariz.; Spokane, Wash.; and Davenport, Iowa _ have also sought bankruptcy protection from a flood of lawsuits by people alleging sexual abuse by priests. Tucson emerged from the process in 2005 without having to sell off parish and school properties.

Roman Catholic dioceses in the United States have paid an estimated $1.5 billion since 1950 to handle claims of sex abuse by its priests.