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Jul 6, 2:25 PM EDT
Portland Archdiocese Filing Chapter 11
By AVIVA L. BRANDT
Associated Press Writer
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PORTLAND, Ore. (AP) -- The Portland Archdiocese said Tuesday that it will file for bankruptcy because it can't afford to pay the potential cost of sex abuse lawsuits, becoming the first Roman Catholic diocese in the nation to seek such court relief.
The Chapter 11 bankruptcy action, planned for Tuesday afternoon, freezes the start of a priest abuse civil trial involving the late Rev. Maurice Grammond, who was accused of molesting more than 50 boys in the 1980s. Grammond died in 2002.
Plaintiffs in two lawsuits involving Grammond have sought a total of more than $160 million. The archdiocese and its insurers already have paid more than $53 million to settle more than 130 claims by people who say they were abused by priests.
Dozens of other claims are pending, and at Tuesday's news conference, church officials said they could not afford what the plaintiffs are asking.
"The pot of gold is pretty much empty right now," Archbishop John Vlazny said, who warned parishioners last year in a letter that the archdiocese might go bankrupt.
James Devereaux, one of the plaintiffs in the lawsuit that had been scheduled to go to trial Tuesday, vowed that in spite of the announcement, "We will continue our fight to finally get the archdiocese to accept the sin of its crimes."
David Slader, a plaintiffs' attorney, said the church was simply trying to avoid the details of the lawsuit coming out in court. "The bishop hasn't begun to touch his pot. He is lying," Slader told reporters.
No other U.S. diocese has ever declared bankruptcy, according to Fred J. Naffziger, a business law professor at Indiana University.
Tom Stilley, the attorney handling the archdiocese's bankruptcy filing, also said it was the first such case, but added other dioceses are considering the same step.
Chapter 11 bankruptcy frees an organization from the threat of creditors' lawsuits while it reorganizes. However, it could also open church records to public scrutiny, and could require church leaders to cede some control to the courts.
The Archdiocese of Boston, which was flooded with civil lawsuits after the clergy sex abuse crisis erupted there, considered bankruptcy, but opted to sell church real estate worth millions to settle the claims. The Diocese of Tucson, Ariz., last month said it was considering filing for bankruptcy to resolve pending lawsuits.
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In the 1990s, the Archdiocese of Santa Fe, N.M., was brought to the brink of bankruptcy, and had to borrow from parish savings accounts to pay millions of dollars in abuse cases.
Nationwide, abuse cases are known to have cost the church more than $650 million since 1950.
Only a handful of priest abuse lawsuits have actually gone to trial in the United States; most settle beforehand in an effort to avoid a public airing of testimony.
In the case involving Grammond, Vlazny said, the diocese made "every effort to settle the cases fairly. I am committed to just compensation. These (plaintiffs') demands go beyond compensation. With 60 other claims pending, I cannot in justice and prudence pay the demands of these two plaintiffs."
In a deposition taken before his death, Grammond said, "I'd say these children abused me. They'd dive in my lap to get sexual excitement."
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