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Tuscon Bankruptcy Plan Favors Parishes

As you may have heard, yesterday a judge approved the Tuscon diocese' Chapter 11 reorganization plan, setting aside $10 million to pay 45 victims, with $5 million set aside for future victims. The good news is that the judge didn't call for the liquidation of any parish assets:

The most hotly contested issue in the 11-month-old case was who owns the parishes and how diocesan assets should be used to compensate victims.

"What's a used church worth?" Marlar asked yesterday. "Who would want to buy it?"

Bishop Gerald Kicanas said most church properties can't be sold because they were bought with donations for use as future parish sites only.

The diocese sold some properties at auction earlier this summer and raised $5.58 million for the settlement fund.

Marlar yesterday said two attorneys who challenged the Chapter 11 plan on the property issue failed to convince him.

He said they did not provide assessed property valuations or other facts that might have caused him to challenge the parishes' cash contribution to the settlement fund as insufficient.

The parish money is already in the bank, said Mike McGrath, an attorney for the parishes.

He said it comes from parishes' reserve funds on hand to pay for unusual expenses - roof repair, homeless programs and summer air-conditioning bills.

Under the plan, the parishes' contribution will legally protect them from future lawsuits claiming sexual abuse by clergy members.

Also, parishes have agreed to file separate incorporation papers so they will be able to manage their assets independently of the diocese.

Hopefully this will bode well for other diocese facing Chapter 11.

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