Court hearing set to determine whether archdiocese owns parishes

Published: 2005-02-07

PORTLAND, Ore. (CNS) -- The U.S. Bankruptcy Court in Portland has scheduled a hearing May 9 to begin addressing one of the most vital questions in the Chapter 11 bankruptcy protection filing of the Portland Archdiocese: Who owns the Catholic parishes and parish schools in the archdiocese? Dioceses across the country will be paying attention. The court's ruling could have an impact nationwide on the way lawyers for victims of clergy sexual abuse seek to evaluate what church assets dioceses can be forced to use for settlement of damage claims. In late January the archdiocese, which covers the western third of Oregon, sent histories of 10 parishes to Judge Elizabeth Perris as test cases. The documents detail religious motivation, the purchase of land and construction of buildings, many built by parishioners' volunteer labor. Lawyers for sex-abuse plaintiffs claim the archdiocese owns the parishes, an assertion rejected by church lawyers as contrary to canon law. When he announced the bankruptcy filing last July, Portland Archbishop John G. Vlazny told reporters church law barred him from seizing parish assets. Since then two other dioceses -- Tucson, Ariz., and Spokane, Wash. -- have also filed for Chapter 11 protection from bankruptcy. Under Chapter 11 of the U.S. Bankruptcy Code, an entity does not actually go bankrupt; it works to restructure itself under court supervision to compensate creditors and claimants equitably without having to liquidate all its assets and dissolve itself. Of 148 Catholic parishes and missions in western Oregon, 69 have joined a coalition to protect parish interests in the archdiocese's bankruptcy proceedings.

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