Diocese of Tucson considers bankruptcy protection

Tucson, Ariz., Jun 16, 2004 / 22:00 pm

The Diocese of Tucson is considering plans to file for bankruptcy protection as a way to resolve pending lawsuits alleging sexual abuse by clergy, reported the Arizona Daily Star.

Diocesan attorney Barry MacBan told a Tucson judge Monday that a federal Chapter 11 plan is already in process.

Bishop Gerald F. Kicanas did not confirm whether the diocese would seek bankruptcy protection. However, he did tell the Arizona Daily Star Tuesday that a Chapter 11 filing is "absolutely realistic."

Chapter 11 bankruptcy would allow the diocese to continue operating its 74 parishes and carry on with its ministry as usual. The court would monitor the diocese’s finances while the diocese tries to pay costs related to sexual abuse claims.

There are 19 cases pending against the diocese. All were filed after a 2002 out-of-court settlement with 10 men, who said they had repressed memories of sexual molestation by four local clergy.

The amount of the settlement was not disclosed but it was estimated to be $16 million. According to the diocese's financial report for 2002-03, the diocese has long-term debt of $4.7 million and a deficit of $7 million, reported the Arizona Daily Star. It could be 10 years before the diocese of out of debt, said the budget director.