Archdiocese enters uncharted waters in church bankruptcy filing

Published: 2004-07-13

WASHINGTON (CNS) -- When the Archdiocese of Portland, Ore., filed for Chapter 11 federal bankruptcy protection July 6, it began a journey into largely uncharted waters. Among the most difficult issues to be faced will be First Amendment concerns as a secular bankruptcy court scrutinizes church finances and oversees reorganization of the archdiocese, holding veto power over major archdiocesan decisions. As the first bankruptcy filing in history by a U.S. Catholic diocese, the process ahead could set a number of precedents. Observers will be watching closely to see what impact decisions of the bankruptcy judge may have on lowering or strengthening traditional walls of church-state separation. Some such decisions might be seen as uniquely applicable to a bankruptcy proceeding and therefore not affecting constitutional questions of church and state in any other context. "The U.S. Supreme Court has made clear that bankruptcy is a privilege, not an entitlement," wrote a leading U.S. bankruptcy expert, David A. Skeel, in an article last year after the Boston Archdiocese began exploring the idea. "When individuals or entities file for bankruptcy, or file pleadings in a bankruptcy case, they waive their right to insist on many of the protections that might otherwise be available to them."

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