Diocese of Tucson files for bankruptcy

Tucson, Ariz., Sep 20, 2004 / 22:00 pm

The Diocese of Tucson filed for bankruptcy yesterday, becoming the second U.S. diocese to seek court protection in recent history. The Archdiocese of Portland, Oregon was the first, July 6.

The filing is a result of the high number of sexual-abuse claims. Bishop Gerald F. Kicanas told parishioners in a letter that filing for Chapter 11 bankruptcy offered "the best opportunity for healing and for the just and fair compensation of those who suffered sexual abuse by workers for the Church in our diocese."

The Tucson Diocese settled 11 abuse lawsuits filed by 16 plaintiffs for an undisclosed sum two years ago. Since then, 22 more molestation claims with 34 plaintiffs have been brought against the diocese, reported The Associated Press.

A plaintiffs' attorney said the diocese was going into bankruptcy partly as a public relations move aimed at making victims appear overly aggressive.

But Bishop Kicanas said his diocese would continue working toward settlements in the cases against it, despite the filing.

According to its financial statement, the diocese had $4.65 million in long-term debt and a $7-million deficit in unrestricted net assets as of June 30, reported AP.

The reorganization plan under the filing calls for most creditors to be paid through the diocese's regular operation. Plaintiffs in sex-abuse cases, however, would be paid from a special pool, which would include $3.2 million from the diocese and money from insurance companies, reported the AP.