Portland bankruptcy seen as high-risk strategy: process requires church disclosures and transparency

National Catholic Reporter, July 30, 2004 by Joe Feuerherd

Next, Gerdano said, the suspension of payments to creditors will give the archdiocese time to pursue claims against its insurers, who argue they are not required to pay additional claims of abuse victims because church officials acted negligently in not removing offending clergy from ministry.

Finally, it is likely the archdiocese will pay less through the bankruptcy process then if each abuse case was tried separately. "Nobody gets all [that they seek] in a bankruptcy," said Gerdano. "Everyone gets a haircut, that's the first rule."

Among all the uncertainties, there are two areas of broad agreement.

"This case is going to establish some precedents that are going to touch every diocese in the country," said Jesuit Fr. Thomas Reese, author of Archbishop: Inside the Power Structure of the American Catholic Church.

Next, it is impossible to foresee the ultimate effect of the Portland archdiocese's risky strategy.

In cases where public corporations file for bankruptcy protection, Chapter 11 provides a road map that makes the outcome relatively clear from the beginning, Gerdano said. A church is different.

"No one can say with any certainty how this will turn out," he said.

[Joe Feuerherd is NCR Washington correspondent. His e-mail address is jfeuerherd@natcath.org.]