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Spokane diocese settles lawsuit against law firm that handled bankruptcy

January 26, 2015

The Diocese of Spokane, Washington, has reached an out-of-court settlement with the law firm that represented the diocese in bankruptcy proceedings.

The diocese had brought a malpractice suit against the firm of Paine Hamblen, charging that the firm failed to secure the interests of the diocese by setting up a $1 million fund to pay settlements to sex-abuse victims. That fund was soon exhausted, prompting victims to file claims against the parishes of the diocese. In December, a bankruptcy-court judge ruled that the lawsuit should go to trial.

In reaching an agreement, the diocese and the law firm issued a joint statement, noting that the accord “does not constitute an admission of wrongdoing by either side.” The terms of the agreement were not made public.

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