Portland Archdiocese files for bankruptcy

Jul 6, 2004 / 22:00 pm

The Archdiocese of Portland has filed for Chapter 11 bankruptcy.  Archbishop John G. Vlazny made the announcement yesterday, citing the great costs of clergy sex abuse lawsuits.

The bankruptcy filing halted the trial of a lawsuit – which was to have begun yesterday – against the late Fr. Maurice Grammond, who was accused of molesting more than 50 boys in the 1980s. Grammond died in 2002.

Plaintiffs in two lawsuits involving Grammond have sought a total of more than $160 million in compensation. The archdiocese and its insurers already have paid more than $53 million over 50 years to settle more than 130 claims by people who say they were abused by priests. Of these claims, more than 100 were settled in the last four years for about $21 million, paid from the archdiocese’s own funds. About 60 claims of sexual abuse are still pending.

“This is not an effort to avoid responsibility,” said the archbishop, referring to the bankruptcy filing. “It is, in fact, the only way I can assure that other claimants can be offered fair compensation,” he said in a letter he read to the faithful.

“Major insurers have abandoned us and are not paying what they should on the claims,” he added

“Attorneys for the plaintiffs claim that the assets of all the parishes and schools and of various trust funds holding charitable contributions are available to pay their clients,” the archbishop said.

However, Archbishop Vlazny explained that, under canon law, parish assets belong to the parish, not to the archdiocese. Despite this, he assured parishioners that he would not seize parish property to settle claims, nor would he use other assets, held in charitable trust.

The archbishop announced his regret at the decision, but he said seeking bankruptcy protection “is a just and prudent course of action.

“This action offers the best possibility for the archdiocese: to resolve fairly all pending claims, to manage a difficult financial situation and to preserve the ability of the archdiocese to fulfill its mission,” he explained. “It will also allow us to continue our good works without fear of an impending large verdict. The operation of our parishes and schools will continue as usual.”

Archbishop Vlazny's full letter can be read at: http://www.archdpdx.org/newsrel/letter.html